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TMI Blog1983 (9) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... consisted of the assessee and her husband, Shri A.V. Reddy, as members. There is no other coparceners other than Shri A.V. Reddy who can claim partition of HUF properties, so the transfer of 100 shares to HUF made by the assessee should be treated as gift to her husband under section 4(2) of the Gift-tax Act, 1958 ('the Act') according to the GTO. 3. Before the GTO it was contended that there should have been no gift by reason of her merely transferring the shares to the name of the karta of the HUF of which she is a member and has categorically stated that the karta of the HUF has no power of disposition over the shares and interest in them will cease on any question arising regarding their disposition and, hence, requested not to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property cannot blend her separate property with the joint family property. In other words, any blending made by her will become void in law as she is disabled to do so. (vi) In view of her letter dated 21-11-1970 her throwing 100 shares to the hotchpot of the HUF II is as void in law and so the property continues to be remained as hers. (vii) The provisions of section 4(1)(d) makes it clear that when a person absolutely entitled to property causes the same to be vested in whatever manner in himself or in any other person jointly, the transaction will be deemed to be a gift only if the other person makes an appropriation for his own benefit and even in such an event only to the extent of the amount of appropriation. There has been no ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, section 4(2) was not in the statute book at the time of making the assessment. Thus, according to the learned counsel appearing for the assessee, there is no provision in the statute book to follow for this assessment year. It was further submitted that where section 64(2) of the Income-tax Act, 1961 ('the 1961 Act') is made applicable, as done by the ITO in the case of the assessee, there can be no gift whatsoever. Further, a gift has to clearly portray the intention of the donor to relinquish all rights over the property gifted and a declaration to this effect should be made by the donor and recorded as such as evidence, which is absent in this case. Accordingly, it was submitted that transfer of shares cannot be considered as a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 1970 that she had thrown the 100 shares into the HUF II hotchpot in which she was a member. The WTO has accepted the transaction and has completed her wealth-tax assessment on that basis. The same thing continued in subsequent years also until section 64(2) was made applicable to this blending in the assessment year 1972-73 and, consequently, the 100 shares were taxed in her hands both in the income-tax as well as wealth-tax. Section 64(2) was, therefore, made applicable to the blending of her individual property with the HUF if property. Accordingly, it was evident that the assessee has already intimated the blending done by her by throwing 100 shares into the HUF II hotchpot to the office in his capacity as WTO and he a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Our attention was also drawn to the fact that when section 64(2) is made applicable as done by the ITO in the case of the assessee there can be no gift whatsoever, even according to the decision of the Supreme Court cited above. Section 122 of the Transfer of Property Act, 1882 defines gift as under : " 'Gift' is the transfer of certain existing moveable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. " For the purpose of finding out whether there existed a valid gift or not, the intention of the donor to relinquish such rights over the property gifted is an essential decisive factor. Here the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to demand partition of the joint family property, cannot blend her separate property with the joint family property. In other words, the blending made by her will become void in law as she is disabled to do so. In Pushpa Devi's case, the joint Hindu family consisted of not only her husband but also other coparceners who have a right to share in property. But in the present case the blending which the assessee had sought to make was with the HUF consisting of only herself and her husband. Hence, it was submitted that there are no coparceners in this HUF. In Smt. Valluri Janakamma v. CGT [1967] 66 ITR 255 the Andhra Pradesh High Court held that an invalid gift is not a gift. It was also brought to our notice that for the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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