1976 (4) TMI 9 - HC - Income Tax

Summary

Issues Involved:

1. Validity of the assessment order passed against the six sons of Shri Kumudeswar Goswami as legal representatives on the basis of the six separate returns filed by them.
2. Determination of whether the gifted properties belonged exclusively to Shri Kumudeswar Goswami as his separate property.
3. Assessment of the gifts made by Shri Kumudeswar Goswami for gift-tax in the assessment year 1960-61.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Order Against the Six Sons:

The Tribunal examined whether the assessment order passed against the six sons of Shri Kumudeswar Goswami as legal representatives was valid. After the death of Kumudeswar Goswami on February 17, 1961, notices were served under section 13(2) of the Gift-tax Act to his six sons, who filed separate returns showing equal amounts of gifts received. The Gift-tax Officer amalgamated these returns and assessed the sons as legal representatives. The Tribunal held that the notices were properly issued and served, and the returns filed by the sons were valid. The Tribunal justified the assessment based on the provisions of sections 13 and 19 of the Act, concluding that the assessment order passed against the six sons was valid. The High Court affirmed this decision, answering the first question in the affirmative and against the assessee.

2. Ownership of the Gifted Properties:

The Tribunal considered whether the gifted properties belonged exclusively to Shri Kumudeswar Goswami as his separate property. The Tribunal observed that it was not necessary to determine whether the family was governed by the Dayabhaga or Mitakshara school of Hindu law. It cited Mulla's Hindu Law, which states that a Hindu, even if joint, may possess separate property that belongs exclusively to him. The Tribunal relied on the recitals in the deeds of gift, which clearly indicated that the properties were treated by Kumudeswar Goswami as his own. The sons accepted the gifts, suggesting they acknowledged the properties as their father's separate property. The High Court agreed with the Tribunal's findings, concluding that the gifted properties belonged exclusively to Shri Kumudeswar Goswami as his separate property. The second question was answered in the affirmative and against the assessee.

3. Assessment of the Gifts for Gift-tax in the Assessment Year 1960-61:

The Tribunal assessed whether the gifts made by Shri Kumudeswar Goswami were assessable to gift-tax in the assessment year 1960-61. The Tribunal found that the gifts of land were made on June 11, 1959, and the shares were recorded on March 4, 1960. The cash gifts were also made during the relevant previous year. The Tribunal rejected the argument that the gifts were made in 1952, noting that under section 123 of the Transfer of Property Act, a gift of immovable property must be effected by a registered instrument. Since the registered deeds of gift were executed in 1959, the gifts were chargeable to gift-tax under section 3 of the Act. The High Court upheld the Tribunal's decision, answering the third question in the affirmative and against the assessee.

Conclusion:

All three questions of law were answered in the affirmative and against the assessee. The High Court upheld the Tribunal's findings that the assessment order against the six sons was valid, the gifted properties belonged exclusively to Shri Kumudeswar Goswami as his separate property, and the gifts were assessable to gift-tax in the assessment year 1960-61.