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TMI Blog1974 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... M. R. M. Ramaswamy Chettiar Versus Commissioner of Wealth-Tax, Madras Judge(s) : A. C. GUPTA. and H. R. KHANNA. JUDGMENT The judgment of the court was delivered by GUPTA J.-- The point for consideration is the same in these two sets of appeals brought on certificate granted by the High Court of Madras. M. P. Periakaruppan Chettiar, appellant in Civil Appeals Nos. 1090-1092 of 1970, is a brother of M. R. M. Ramaswami Chettiar, appellant in Civil Appeals Nos. 1093 and 1094 of 1970. The appeals preferred by M. P. Periakaruppan Chettiar arise out of a reference under section 66(1) of the Indian Income-tax Act, 1922, section 27(1) of the Wealth-tax Act, 1957, and section 26(1) of the Gift-tax Act, 1958, made at the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppan Chettiar had business interest and other properties both in Ceylon and India. He had four sons, Narayanan, Ramaswami (appellant in C. As. Nos. 1093 and 1094 of 1970), Periakaruppan (appellant in Civil Appeals Nos. 1090-1092 of 1970) and Palaniappan. By two deeds, both executed on April 26, 1932, Muthukaruppan Chettiar conveyed by way of gift all his business interests and properties in Ceylon to his first three sons. It is stated that the fourth son who was a minor at the time was given cash and properties in India equal to one-fourth of the value of his father's entire assets. For some time following the execution of the deeds of gift, Narayanan, Ramaswami and Periakaruppan carried on the business in Ceylon in partnership. Muthukarupp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to his sons by way of gift but by way of partial partition among the members of the Hindu undivided family consisting of himself and his two sons. The Gift-tax Officer did not accept this claim. The Appellate Assistant Commissioner on appeals preferred by the assessee held that he should have been assessed in the status of a Hindu undivided family and on this view allowed the assessee's claim in the income-tax, wealth-tax and gift-tax proceedings. The Tribunal upheld the Appellate Assistant Commissioner's decision and dismissed the appeals preferred by the department from his order. Ramaswami Chettiar also was being assessed in the status of an individual for many years even after the deeds of gift were executed. In the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancestral. In this court Mr. S. T. Desai, appearing for the appellant in both sets of appeals contended that on a proper construction of the two deeds executed by Muthukaruppan in 1932 it would appear that the gift was really not to the sons absolutely but to their respective family branches of which they were the heads. There is no dispute that if the sons only were the donees, what they received by the gift would not be ancestral property in their hands in view of the fact that the Ceylon assets were the self-acquired property of the donor. If, however, the donor wanted to confer, as the High Court puts it, a " cumulative benefit " on the respective family units of the three sons, the property gifted would be the property of the Hindu un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal and the High Court as deeds of gift. These " diverse other causes and considerations " together with the donor's natural love and affection for his sons prompted him to execute the documents. Whatever the reasons were behind the gift they are not relevant on the question as to who were the object of the bounty. Mr. Desai further pointed out that the gift was stated to be in favour of the donees and " their respective heirs, executors, administrators and assignees " which, according to him, indicated that really the objects of the bounty were the sons as heads of their respective families. We are unable to agree. It is clear from the deeds that the donor's desire was to transfer the properties to the three sons whom he named and de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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