1979 (5) TMI 97

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....nammal. The Karta of the said HUF was a partner in the firm of M/s P.S.M.M.N. Mariappa Nadar & Co. which was carrying on business in hardware with one-third share therein, the capital invested therein being from out of the funds of the aforesaid HUF. On 3rd Nov., 1970 a partial partition was entered into between the Karta and his sons whereunder Rs. 30,000 out of the capital invested in the said firm was allotted absolutely to G. Augustin and Rs. 30,000 was allotted to each of the three minor sons and the balance was allotted to the Kara to be taken by him absolutely. It was provided inter alia in cl. 5 of the deed of partition that the father shall be liable to maintain, educate and perform the marriages of the daughters and also maintain ....

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.... was made on HUF which had filed the return. Aggrieved by such assessment the assessee preferred appeal to the AAC reiterating the contention that the transaction of transfer of Rs. 30,000 to the two unmarried daughters did not amount to gift. The AAC accepted the above contention relying upon the decision of the Andhra Pradesh High Court in CGT vs. Ch. Chandrasekhara Reddy (1). Hence this appeal. 4. The contention taken in the grounds of appeal is that the AAC has erred in holding that the transaction by which Rs. 30,000 was transferred to the two daughters did not amount to a gift, that he failed to note that the gifts were not void but were only voidable and hence was subject to gift-tax. The assessee's authorised representative conte....

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....ily which had been invested in the firm belonged to him absolutely and exclusively and none of his sons had any right in it. It is from out of this fund that Rs. 30,000 was transferred to the two daughters (Rs. 15,000) each by making suitable entries in the books of the firm on 20th Oct., 1974. Therefore such transfer was made by Gurusamy Nadar only of his separate and exclusive property. It cannot be considered as a transfer made by a HUF which is said to consist of Gurusamy, his wife and his two minor daughters. It is not known how such a Hindu family could have come into existence at all. As already pointed out the HUF consisting of the father, his wife, sons and the daughters never became disrupted. There is no question therefor for any....