1996 (9) TMI 99

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... law in affirming the order of the Appellate Assistant Commissioner of Gift-tax cancelling the assessment order passed by the Gift-tax Officer against the assessee ? " The assessee, an agriculturist, is a Jat Sikh by caste. During the course of the wealth-tax proceedings, it was noticed by the Gift-tax Officer that the assessee had transferred agricultural land measuring 70 kanals 12 marlas to his four major sons ; Sarvshri Gurpal Singh, Rachhpal Singh, Gurdial Singh and Hardial Singh, by virtue of a court decree dated April 16, 1972. Since, the transfer was without consideration, the Gift-tax Officer treated it to be a gift under section 4 of the Gift-tax Act, 1958 (hereinafter referred to as "the Act"). The assessee pleaded before the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....shall be presumed to be governed by his personal law unless proved to the contrary. A Jat Sikh being a Hindu, is ordinarily governed by his personal law, i.e., the Hindu law, and, therefore, there is a presumption that he constitutes a joint Hindu family. The property being ancestral in nature, the same was Hindu undivided family property. The assessee and his sons formed a coparcenary. The next question to be examined is whether a karta of a Hindu undivided family can make a valid gift of ancestral property either to a coparcener or a stranger. A coparcener becomes owner of the ancestral property by birth. Under the Hindu law, a karta is not the absolute owner of the property. Each coparcener is the owner of every bit of the property ti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... And if there is no gift, the jurisdiction of the Gift-tax Officer to tax the same does not arise. It was conceded by Mr. Awasthy, learned counsel for the Department, that the factum of the gift has to be proved, i.e., there must be a gift within the meaning of the Gift-tax Act before the gift can be held to be taxable. If there is no gift, the Gift-tax Officer cannot bring it to tax. However, the text of Hindu law is very clear that a father cannot make a gift of the coparcenary property to his minor sons. If he does so, the gift would be void. It appears to me that in view of the provisions of the Gift-tax Act and the provisions of the Hindu law, the gift in question would be void. " The ratio of the aforesaid case is fully applicable....