Blending self-acquired property into Hindu family hotchpotch is not a gift under the Gift-tax Act.

Blending self-acquired property into the common hotchpotch of a Hindu undivided family is a unilateral act by which the owner abandons separate rights and impresses the property with joint family character. Because there is no bilateral transfer, donor, donee, or acceptance, the act does not amount to a gift under the Gift-tax Act, 1958, and section 2(xxiv)(d) applies only to a transaction between one person and another. The distinction between a male coparcener and a female member does not alter the tax character of the act. It was therefore not a gift within the Act.

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Issues: Whether the act of throwing self-acquired property into the common hotchpotch of a Hindu undivided family amounts to a gift under the Gift-tax Act, 1958, including where the act is done by a female member who is not a coparcener.

Analysis: The governing principle was that blending separate property with joint family property is a unilateral act by which the owner abandons separate rights and impresses the property with the character of joint family property. Such an act does not amount to a gift because there is no transfer by way of a bilateral transaction, no donor and donee, and no acceptance is involved. The definition of transfer in section 2(xxiv)(d) of the Gift-tax Act, 1958 applies only to a transaction entered into by one person with another and cannot extend to a unilateral act. The distinction drawn between a male coparcener and a female member did not change the legal nature of the act for gift-tax purposes.

Conclusion: The act did not constitute a gift within the meaning of the Gift-tax Act, 1958, and the question was answered in the negative in favour of the assessees.

Ratio Decidendi: A unilateral act of blending self-acquired property into the common stock of a Hindu undivided family does not constitute a gift or a transaction within the meaning of section 2(xxiv)(d) of the Gift-tax Act, 1958.

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