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TMI Blog1957 (9) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... out the year 1945. On the 31st March 1949 the assessee made a transfer entry in the books of the family debiting the capital account with a sum of ₹ 2,40,000/- representing 80 per cent share capital of 300 shares of the Simbholi Sugar Mills Limited and crediting the account of Sardarni Ahalya Bai with a corresponding amount. In the year 1950-51 the assessee, who is the karta of the Hindu undivided family, submitted a re-turn in which he declared an income of ₹ 1,03,952/-. This return did not include the in-come on 300 shares of the Simbholi Sugar Mills which had been transferred by the assessee to his wife. Sardarni Ahalya Eai submitted a separate return of her own in which she declared that she had received a sum of ₹ 48,000/- by way of income on the shares which had been transferred to her. 4. The Income-Tax Officer came to the con-clusion that the assessee had transferred pro-(sic) to his wife without the consent of the other coparcener, that this transfer was effected without legal necessity and without a corresponding benefit to the estate arising out of this transfer, and that the gift of property was neither reasonable nor for performing indispensable ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and acceptance by the donee. A Hindu father has full power to alienate coparcenary property with the consent of his sons, but his power to part with such property without their consent is limited by the scriptures. In Section 225 of Mulla's Principles of Hindu Law the learned author declares that although sons acquire by birth rights equal to those of a father in ancestral property both movable and immovable, the father has the power of making within reasonable limits gifts of ancestral movable property without the consent of his sons for the purpose of performing indispensable acts of duty, and for purposes prescribed by texts of law, as gifts through affection, support of the family relief from distress and so forth. A 'gift of affection' may be made to a wife, to a daughter, and even to a son. But the gift must be of property within reasonable limits. A gift of the whole, or almost the whole, of the ancestral movable property to one son to the exclusion of the other sons, cannot be upheld as a 'gift through affection' prescribed by the texts of law. 7. Mr. Sikri who appears for the department contends (1) that the impugned gift is void and not voidabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssignment executed by one of the two kartas of a joint Hindu family is voidable at the option of the other coparceners who alone may be affected by his unauthorised act, and no person who is a stranger to the family and does not possess a right to have thy transaction defeated on other grounds, lor example, under Section 53 of the Transfer of Property Act, has a locus standi to intervene and impugn such an alienation merely because it is in excess P; his authority to deal with the property for family purposes; Ram Kumar v. Mohan Lal, AIR 1940 Pat 270 (G); Pankajini Debi v. Pramatha Nath, AIR 1942 Pat 95 (H). 10. In view of these decisions I have no hesitation in holding that the gift is not void but merely voidable and that it was open to S. Harindar Singh who is the other member of this joint Hindu family to avoid it. He has not cared to do so, though several years have gone by. On the contrary there is evidence to show that he assnted to the gift for he was present at the meating of the Board of Directors of the Simbholi Sugar Mills which was held on the 28th December, 1948 and in which the question of the transfer of 300 shares to Sardarni Ahalya Bai was taken up for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the intention of making a gift but with the intention of avoiding payment of income-tax. The Simbholi Sugar Mills Limited, it is argued, is to all intents and purposes a family concern as the family owns nearly 800 out of 1200 snares. If the family controls the company and if it can easily prevent an alienation by the Sardarni Sahiba, it is wholly immaterial whether the shares stand in the name of the assessee or of his wife. This being so, it is contended, the shares were transferred to Sardarni Ahalya Bai not with the object of manifesting the donor's love and affection for his wife but with the object of evading payment of the tax which would be recoverable on the income of the shares. I regret I am unable to concur in this contention. A tax-payer has full liberty to decrease what otherwise would be his taxes, or altogether to avoid them, by means which the law allows. The fact that a certain transaction has been entered into with the ulterior object of enabling the tax-payer to avoid payment of income-tax would not render the transaction void, for motive alone cannot make unlawful what the law allows. In such a case the transaciton should be examined with the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d shares had ceased to remain an asset of the Hindu undivided family, that the transfer was irrevocable and that the shares had become the exclusive property of the donee. The consequences which the donor contemplated and which he expected to result from these acts were that the family would cease to own 300 shares and that the donee would acquire full proprietary rights in the said shares. He manifested a clear intention to relinquish the right of dominion on the one hand and to create it on the other. The intention to make a gift was a present intention. He put it in the power of the donee to claim ownership of the shares, to receive dividends thereon and to exercise all other rights of ownership. This gift was made by the donor to his own wife and must therefore be presumed to have been made out of love and affection. 13. Assuming for the sake of argument that the gift was not made with the consent of S. Harindar Singh the question arises whether the gift itself was reasonable. There can be no doubt that a Hindu father governed by the Mitakshara has full power to make within reasonable limits gifts of movable property to his wife, daughter etc., and the Courts have consist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom 373, at p. 330 (N), When their Lordships observed as follows : As to the fact of the gift and the transfer there is now no controversy. At the time of the gift Bhagwan Das was the head of the family, and indeed the only male member of it, and the estate was large. Tyabji J., considered that the gift was not justified by the cirumstancss of the case. The Court of Appeal, having in the meantime ascertained that the gift was made out of income, not out of capital, took a different view, and decided in favour of Navalbai. Mr. Sikri admits that it was within the power of the assessee, in his capacity as father of S. Harindar Singh, to transfer by way of gift a part of the ancestral movable property of the joint Hindu family, but he contends that the value of the gift which was made in the present case was so large that it cannot possibly be said to fall within the ambit of the expression reasonable limits . In any case he contends, on the authority of Lakshman Dadanaik v. Ram Chandra, ILR 5 Bom 48 (PC) (O), that this Court should not extend the doctrine of alienability by a coparcener of his undivided share without the consent of his cosharers beyond the decided cases. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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