9911796707
TMI Blog1982 (4) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970 she had gifted some properties valued at Rs. 63,659 to minor Krishnamurthy and minor Ramamurthy (her brother's other two sons who are natural brothers of her adopted son Shri P. Raguraman) and paid gift-tax thereon. We are, however, concerned with the settlement of properties valued at Rs. 64,200 during the year ending 31-3-1971 on her adopted son Raguraman by a deed of settlement dated 27-9-1970. Smt. Narayani Ammal who was alive at the time of assessment resisted gift-tax liability by claiming that the gift was void on the ground that the adoption converted her inherited properties into family property and that, therefore, she had no right of disposal over them. The GTO did not accept the contention. He was of the view that she had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deleted on the basis that he became a co-owner of the property on adoption. 4. The learned departmental representative claimed that the arguments were far-fetched. He relied on section 12 of the Hindu Adoptions Act for the proposition that the adoption was to the lady and not to the family. The lady had become the absolute owner and relied upon section 14 of the Succession Act for his proposition. He claimed that adoption does not divest her of her ownership. Hence, the argument that she had no right of disposal and the alternative argument that the donee had only 50 per cent interest, according to him, were based upon a view of law which absolutely ignored the new Hindu Code. As for the argument that the gift was incomplete, he claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is whether the adoption of minor Raguraman, her brother's son, by an adoption deed dated 26-9-1966, divested her of her full ownership. A clause in the adoption deed mentions that the adopted child should have all his rights as an adopted son. This was claimed to be a stipulation which showed that the lady gave up her absolute right. We are unable to agree. It gives nothing more than the ordinary right of an adopted son. Section 13 of the Hindu Adoptions Act lays down that "subject to any agreement to the contrary, an adoption does not deprive the adoptive father or the mother of the power to dispose of his or her property by transfer inter vivos or by will". The present position of law in this regard will be obvious from the following ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting widow has obtained the property of her husband for a limited estate with the power of adoption to him under a will or settlement and the will or the settlement mentions that on adoption by her the adopted son should take the property, the widow would be divested by the adoption and any intermediate alienation by her contrary to the terms of the will or settlement will not be binding on the adopted son. The same will be the position if the adoption is of a daughter instead of a son." The learned representative for the assessee relied upon the decision of the Supreme Court in Sitabai v. Ramchandra [1970] 2 SCR 1 cited at page 1010 of Mulla's Hindu Law, 14th edition, for a contrary proposition. He was obviously in error because it rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer of Property Act, 1882. A gift of movable or immovable property, therefore, requires acceptance under general law. Without such acceptance, the gift is incomplete. It is no gift at all. Even the omission of the words relating to acceptance in the definition of 'gift' for gift-tax purposes cannot have the effect of taxing what is not a gift as a gift. Thus far, we are in agreement with the learned representative for the assessee. However, when the gift document is seen, we are unable to see any factual basis for his argument. It is because the document itself shows that there has been acceptance. The registered gift deed dated 27-9-1970 appoints Perumal Reddiar (the assessee's brother and incidentally the natural father of the minor-do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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