Blending separate property into joint family hotchpot is not a gift under the Gift-tax Act.

A Hindu coparcener's unilateral act of throwing separate property inherited from his brother into the common hotchpot of the Hindu undivided family does not amount to a gift under section 2(xxiv) of the Gift-tax Act, 1958. The property becomes impressed with the character of joint family property by the owner's own intention, but the blending involves no donor, no donee and no acceptance, and is not a transfer or disposition in the statutory sense. On that footing, the act is not chargeable to gift-tax and gift-tax proceedings based on such blending cannot stand.

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Issues: Whether the assessee's act of throwing his separate property, inherited from his brother, into the common hotchpot of the Hindu undivided family constituted a 'gift' within the meaning of section 2(xxiv) of the Gift-tax Act, 1958, so as to attract gift-tax.

Analysis: The property was impressed with the character of joint family property by the assessee's own volition and intention. Such blending was a unilateral act under Mitakshara Hindu law, involving no donor, no donee, and no acceptance. The act did not amount to a transfer or disposition in the sense contemplated by section 2(xxiv) of the Gift-tax Act, 1958. The controlling principle was that self-acquired property thrown into the common stock does not become a taxable gift merely because it ceases to be separate property.

Conclusion: The act did not constitute a gift and was not assessable to gift-tax.

Final Conclusion: The impugned notices and proposed assessment were set aside, and the petitioner obtained relief against gift-tax proceedings.

Ratio Decidendi: The unilateral act of a Hindu coparcener in blending separate property with joint family property by throwing it into the common hotchpot does not amount to a gift or taxable transfer under the Gift-tax Act, 1958.

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