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Validity of a gift in favor of a Hindu deity under the Transfer of Property Act. Detailed Analysis: The judgment delivered by the Allahabad High Court pertains to a reference made by the Income-tax Appellate Tribunal under section 66(1) of the Indian Income-tax Act, 1922. The case involves an assessee, a registered firm with six partners, one of whom, Nanhi Devi, made gifts to various persons, including a deity, Sri Parmanand Behariji Maharaj. The firm claimed a deduction of interest paid on the sums credited to the donees, which was disallowed by the Income-tax Officer and the Appellate Assistant Commissioner. The Tribunal allowed the claim for interest credited to the donees but rejected it for the deity. The Tribunal held that acceptance of the gift on behalf of the deity was necessary, which was not evidenced, thus concluding that Nanhi Devi had not relinquished ownership of the funds credited to the deity's account. The Tribunal also considered the applicability of section 122 of the Transfer of Property Act to Hindu religious endowments. The main issue in question was whether there was a valid gift in favor of the deity by Nanhi Devi. The court analyzed the definition of "gift" under the Transfer of Property Act, emphasizing the requirement of a transfer of property from a living person to one or more living persons. The court deliberated on the concept of a deity as a "living person" within the legal framework, concluding that a deity does not fall under this definition, making the application of section 122 to gifts to deities untenable. The court further discussed the necessity of acceptance by the donee for a valid gift, highlighting that dedication to a Hindu deity does not require acceptance in the same manner as conventional gifts. The court also addressed the misconception by the Tribunal regarding the applicability of section 123 of the Transfer of Property Act to Hindu religious endowments. It clarified that the element of acceptance is relevant only for transactions akin to gifts under section 122, not for religious endowments. The court emphasized that the creation of an endowment for a deity does not require a formal trust or specific ceremonies, but rather the clear designation of property, purpose of dedication, and divestment of beneficial interest by the founder. In conclusion, the court held that while there was no valid "gift" as defined in section 122 to the deity, there was an endowment by Nanhi Devi in favor of the idol. The court directed the judgment copy to be sent to the Income-tax Appellate Tribunal and awarded costs to the assessee. The judgment provides a comprehensive analysis of the legal principles surrounding gifts and endowments to Hindu deities under the Transfer of Property Act, clarifying the requirements and implications of such transactions.
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