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TMI Blog1980 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 50,000 under s. 5(1)(viii). The GTO, in the view that the donor is the HUF and the donee is the spouse of the karta, held that s. 5(1)(viii) is not applicable to the gift in question. In that view, he allowed only the statutory exemption of Rs. 5,000 and rejected the claim for deduction of Rs. 50,000. The assessee preferred an appeal before the AAC. The AAC held that the karta of a joint Hindu family can make within reasonable limits gifts, out of affection, of ancestral movable or immovable property to his wife and that, in the instant case, since the net worth of the assessee's family was of the order of Rs. 20,00,000 and more, the gifts were validly made. He was also of the view that merely because the gifted property belonged to the family, it would be incorrect to identify the family itself as the donor. He was, further of the view that if in the exercise of his power of disposition over the joint family property a gift is made by a karta, he, the karta, would be the donor and the fact that the gift might have taken effect out of some other person's interest might be immaterial since what is essential is only the capacity to alienate and not the ownership of What is alie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Hindu family consisted of only one male member and the other members were females or the only male member was the sole surviving coparcener, the said male member is entitled to dispose of the coparcenary or the joint Hindu family property as if it were his separate property. He may sell, mortgage or he may make a gift of it. These propositions are well settled and quoting any decision would be pedantic. In this case, therefore, when the father, a sole member, gifted the property in favour of his wife, it could not but be only in his character as an individual with all the powers vested in him in the disposition of joint family property, as if it were his separate property. Since at the time he was the sole surviving member, he had not been fettered by any of the conditions imposed on the karta of a joint Hindu family or a coparcenary and he shall be deemed to have acted in his individual capacity while making the gift in favour of his wife. The same result would be reached even if it were a case when the father-karta was not the sole surviving coparcener or the only male member of a joint family. A coparcener has no right to alienate or gift coparcenary property or the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGT [1966] 59 ITR 176 (AP). In that case also the assessee who happened to be the karta of an HUF made a gift of certain joint family property to his wife, but the gift was evidenced by a written document. The relevant portions of the document mentioned that the donee was his wife and that out of love and affection for her he is making a gift to the donee of certain landed property which are described in the schedule thereto. It was pointed out that there was nothing in the document to indicate that he was making the gift in any capacity other than as the husband and based on such construction of the document it was held that there was no obstacle in the way of the applicability of s. 5(1)(viii) of the Act. The decision in Vadrevu Venkappa Rao v. CGT [1974] 95 ITR 313 (AP) is also similar on facts to the one decided in Jana Veera Bhadrayya v. CGT [1966] 59 ITR 176 (AP). Again, after referring to the recitals in the document, the court observed that the, document itself does not mention anywhere that the assessee was making a gift of the property as an HUF and that the fact that he happens to be a manager or karta of the joint family cannot make the gift a gift by the HUF. In tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the Tribunal on the question of capacity of the donor in which the gift was made, there was a remand to the Tribunal. The learned counsel for the revenue also relied on the decision in CGT v. Harbhajan Singh and Sons [1979] 119 ITR 542, in which the Punjab and Haryana High Court, on facts, came to the conclusion that the gift was by the HUF and not by the individual. In fact they did not purport to differ from the earlier Division Bench judgment of the same High Court, nor the decisions of the Andhra Pradesh High Court aforementioned. If this decision were to be taken as an authority for holding that whenever the karta of an HUF makes a gift it shall always be deemed to be that of the HUF, we are unable to subscribe to that view. The decisions of the Andhra Pradesh High Court and the earlier judgment of the Punjab and Haryana High Court, therefore, support our conclusion, even apart from the principles under the Hindu law relating to the powers of a father-coparcener that he can deal with the family property in his individual capacity. In this connection we may also refer to one other fact. Section 2(ix) of the G . T. Act defines a donor as meaning any person who m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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