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Assessment of income of a Hindu undivided family for the year 1970-71, validity of a gift of immovable property by the karta to his wife, inclusion of income from the gifted property in the hands of the Hindu undivided family, interpretation of Hindu law regarding alienation of property without legal necessity, and the taxability of income derived from transferred properties. Analysis: For the assessment year 1970-71, the Assessing Officer assessed the income of the assessee, a Hindu undivided family, which included income from various sources. The issue arose regarding a gift of immovable property by the karta to his wife, which the Income-tax Officer deemed prejudicial to the interest of minor children in the family, considering it void. The Appellate Assistant Commissioner and the Income-tax Tribunal upheld the decision that the gift was void, and the property continued to belong to the Hindu undivided family, leading to the inclusion of income from the property in the family's assessment. The assessee then sought to refer questions of law to the Appellate Tribunal, which was initially refused. Upon further legal proceedings, the High Court was tasked with determining the validity of the gift of immovable property and the taxability of income derived from it. The court considered the interpretation of Hindu law regarding alienation of property without legal necessity, citing relevant legal precedents. The court referenced a Supreme Court decision and a previous judgment of the High Court to establish that alienation of property by the karta without legal necessity or for the benefit of minors is voidable, not void ab initio. Based on this legal principle, the court ruled in favor of the assessee, stating that income derived from the transferred property should not be assessable in the hands of the Hindu undivided family. In conclusion, the High Court held that the gift of immovable property was not void but voidable, and therefore, the income from the transferred properties should not be taxable in the hands of the Hindu undivided family. The court's decision was based on the interpretation of Hindu law and relevant legal precedents regarding the alienation of property without legal necessity.
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