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TMI Blog1968 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... otment of the properties in question to the adopted son under the deed constitutes a ' gift ' within the meaning of the Gift-tax Act ?" The Tribunal in its statement of the case has stated that, though separate applications were filed by the assessee for referring the questions of law arising under the Wealth-tax Act, the Income-tax Act and the Gift-tax Act, viz., R.As. Nos. 1927 and 1928 of 1963-64 (W.T.A. Nos. 1714 and 1715 of 1962-63 respectively) R.A. No. 1929 of 1963-64 (I.T.A. No. 10117 of 1962-63) and R.A. No. 586 of 1964-65 (G.T.A. No. 20 of 1963-64), in their opinion, a similar question of law does arise out of the said orders and, therefore, they were making a consolidated reference for the opinion of the High Court. We must at once point out that this is not the proper way of making a reference while dealing with three different orders passed under three different Acts, each of which provides specifically for a reference to be made under that Act. Three references should have been made, each under a different Act. Even if a consolidated reference is made, the Tribunal should have set out the statements of the case under the different Acts separately. We would have ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of lands and buildings. This contention also was rejected by the Appellate Assistant Commissioner. Further appeals to the Appellate Tribunal were also rejected. In so far as the income-tax reference is concerned, the question is whether the property which is the subject-matter of the partition deed is joint family property or separate property. Admittedly, the property was self-acquired property of the father on the date of the alleged partition. If so, the only question for our consideration is whether the self-acquired property has become impressed with the character of joint family property. It is an undoubted proposition of Hindu law that a Hindu might throw his self-acquired property or separate property into the hotchpot or blend it with joint family property, or, by an unequivocal declaration of a clear intention, convert the whole or any part of his self-acquired property into joint family property (vide D. Sadasiva Vittal v. Bolla Rattain). In order to impress the self-acquired or separate property with the character of joint family property no particular method or formality is necessary. A mere declaration of an unequivocal intention to treat the separate property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an intention of impressing the self-acquired properties of the father a moment prior to the adoption with the character of joint family property. There is nothing to indicate, except that the intention was to divide the properties between himself and his adopted son, that the self-acquired properties were to be treated as joint family properties. Sri Veerabhadrayya contends, that the words " from now onwards " would themselves connote that he intended to treat the self-acquired property as joint family property. But we have searched in vain to ascertain from the deed of partition itself as to whether any words or phrases or terms have been used which will in the slightest indicate that there was a prior blending of the properties or the self-acquired properties being impressed with joint family character. Their Lordships of the Supreme Court, in the decision to which we have referred, were considering a deed in which such indications were given. In fact, in that case there was a clear recital to the following effect : "Whereas the party of the first part has been earning commission and acquiring properties and blending his money with the assets inherited from his father and tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it, only after the minor has become a major. On a prima facie reading of this clause, it is our view that there is no postponement of the vesting of the property in the minor. What was required of the guardian was nothing more nor less than what a guardian is expected to do in each case where he is managing the properties of a minor, namely, to be in possession of the properties and improve the same, to manage it and accumulate the income and give an account of it to the minor when he or she becomes a major. The decisions which Sri Veerabhadrayya has cited are cases relating to properties where the vesting of the property has been postponed to the date of attainment of the majority of the minor. It is an accepted principle of the law of trusts that the trustee is the legal owner of the property and the object of the trust is the beneficiary, namely, the cestuique trust. If the benefit which the cestui que trust is entitled to is postponed or is to commence only from a particular date, then the beneficiary has no vested interest in the trust property until the happening of that event. Both the cases cited, viz., Commissioner of Income-tax v. Manilal Dhanji and Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of rents from immovable properties settled upon trust. It also provided that the trust shall cease to operate when the aforesaid minor attains the age of 21, which will be in March, 1962, from when the trust property shall vest absolutely in her. There was however no provision in the document for the payment of any portion of the income or the corpus of the trust properties to the beneficiary until she attained the age of 21 years. It was held that the provisions of section 16 do not apply. These cases are clearly distinguishable and have no application to the facts of the instant case, where there is no postponement of the vesting of the property in the minor. Moreover, in the partition deed, the clause immediately preceding the clause referred to above, which provides that "the property worth Rs. 58,949-5-6 shall be enjoyed by the second individual of us freely with absolute powers of gift, mortgage, exchange, sale, etc.", shows that there has been an immediate vesting of the properties in the minor. In this view, we are in agreement with the Tribunal's conclusion that the income from the properties allotted to the minor can be included in the total income of the assessee un ..... 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