2003 (10) TMI 14

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.... a return in respect of the gift-tax in the status of an Hindu undivided family and claimed exemption under section 5(1)(viii) of the Gift-tax Act, 1958 (hereinafter referred to as "the Act") raising a contention that he, as the "karta" of the Hindu undivided family, had gifted the gold ornaments belonging to the Hindu undivided family in favour of his wife and he could have done so in law. The claim was negatived by the Gift-tax Officer on the foundation that it was not a gift by an individual to his wife but was a gift by the "karta" of the Hindu undivided family to one of the members of the Hindu undivided family out of the assets of the Hindu undivided family and, therefore, exemption under section 5(1)(viii) of the Act was not permissi....

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....e were inclined to state at a later stage, we do not think it necessary to wait for the service return. To appreciate the controversy in issue, it is apposite to reproduce the essential part of section 5(1)(viii) of the Act which is relevant for our purpose. It reads as under: "5. Exemption in respect of certain gifts. - . . . (viii) to his or her spouse, subject to a maximum of rupees fifty thousand in value in the aggregate in one or more previous years, the expression 'spouse' in this clause, where there are more wives than one, meaning all the wives together." The submission of Mr. Arya is that if the anatomy of the aforesaid provision is scanned in the proper perspective, it would ring as a bell that the gift in question ha....

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....es or conditions precedent are satisfied, the "karta"-donor is competent to transfer. This being the centripodal issue and the core question, it is necessitous to understand the basic concept of a Hindu undivided family. If it is held that a Hindu undivided family can consist of a single member, his wife and his unmarried daughter, in that context a male member is entitled to deal with his coparcenary property as if it were his separate property. In this regard we may refer with profit to the case of Jana Veera Bhadrayya v. CGT [1966] 59 ITR 176 wherein the High Court of Andhra Pradesh accepted the proposition that the "karta" of a Hindu undivided family can make a gift of certain joint family property to his wife and that there is no....

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....ist of a single male member, his wife and his unmarried daughters. In a case, where the joint Hindu family consisted of only one male member and the other members were females or the only male member was the sole surviving coparcener, the said male member is entitled to dispose of the coparcenary or the joint Hindu family property as if it were his separate property. He may sell, mortgage or he may make a gift of it. These propositions are well-settled and quoting any decision would be pedantic. In this case, therefore, when the father, a sole member, gifted the property in favour of his wife, it could not but be only in his character as an individual with all the powers vested in him in the H disposition of joint family property, as if it ....