1986 (5) TMI 73

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....wife. There is no dispute with regard to the gift of the property to the other two sons. The GTO held that the gift is out of the HUF property and the HUF cannot have a spouse and so exemption claimed under section 5(1) (viii) cannot be allowed. On appeal, the AAC upheld the same. 2. The learned counsel for the assessee submitted that there was a partition of the immovable properties consisting of house and agricultural lands between the karta Shri Y. Satyanarayana Setty and his two sons with effect form 1-4-1975 and the said partition has been accepted by the WTO by his order dated 28-2-1979 under section 20(1) of the Wealth-tax Act, 1957. Hence, the karta being the sole surviving coparcener after the partition, was entitled to gift the....

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....y property either by gift or sale. Thus, any alienation by the sole surviving coparcener either by way of gift or sale has to be taken as alienation by him in his individual capacity. Thus, the settlement of the house property by Shri Y. Satyanarayana Setty to his wife Smt. Y. Kamakshamma was in his individual capacity and it is exempt under section 5(1) (viii). 4. We will not consider the other contentions raised. We have gone through the settlement deed dated 10-5-1978. The relevant portion as per English translation reads as under : "First party is my wife and second and third parties are my sons. Out of love to you and as you always obeyed my orders I am settling on you today with all rights the house property valued Rs. 97,000 to....

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....d at Rs. 34,000 belonging to the joint family to his wife. He filed a return and claimed exemption in respect of the gift to his wife. On those facts, the Andhra Pradesh High Court held that the assessee is entitled to exemption under section 5(1) (viii). It was observed as under : "The controversy relates to the capacity, in which he made the gift. It cannot be postulated that he made the gift as the manager of the family, since the words of the document make it abundantly clear that it is in his capacity as the husband that he made the gift. If that were so, there is no reason why this gift should be excluded from the ambit of clause (viii) of section 5(1) of the Act ..." Thus, it was held that where the assessee who happened to be ....

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....) (viii) to the extent of Rs. 50,000 gifted to his wife. 7. The decisions relied on by the learned departmental representative have no application to the facts of the instant case. The decisions of the Andhra Pradesh High Court in CGT v. Ch. Chandrasekhara Reddy [1976] 105 ITR 849 is a case of a Hindu father gifting 10 acres 54 cents of land out of 27 acres he had to his only daughter in consideration of her marriage. That has no application as it does not relate to section 5(1) (viii). The Andhra Pradesh High Court in CED v. Smt. P. Leelavathamma [1978] 112 ITR 739 has no decision of the application as that case relates to estate duty. The deceased who was the sole surviving coparcener dies intestate leaving behind him his mother, widow....