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TMI Blog1979 (10) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajgarhia ? (2) If the answer to question No. (1) be in the negative, whether, on the facts and in the circumstances of the case, the dividend income on 35 gifted shares could be included in the assessment of the assessee ? " The assessee-opposite party is an HUF which derives income from interest, dividend, etc. It appears that one Jhohar Mull had two sons, Rai Saheb Sundar Mull and Ram Kumar. Rai Saheb Sundar Mull had six sons. Partition took place in the family of Rai Saheb Sundar Mull. The assessee, Ram Gopal Rajgarhia, who is one of the sons of the said Rai Saheb Sundar Mull, apart from other properties, received 62 shares of India Mica Supply Company Ltd. In 1951, he purchased three further shares, and, as such, he held 65 shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the present case the gift of 35 shares by the assessee to his minor son was permissible in law. I may point out at the outset that the gift in question is being impeached only on legal grounds and not on the ground that it was a fraudulent device on the part of the assessee to escape the assessment over the dividends received against 35 shares. Learned standing counsel appearing for the department submitted that a coparcener cannot make a gift of his undivided interest in the family property, movable or immovable. In support of this contention, he made reference to art. 258 of Mulla's Principles of Hindu Law and to the cases of Baba v. Timma [1883] ILR 7 Mad 357 [FB], R. Runganatham Chetty v. Ramasami Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r partition and in such a suit, if without prejudice to the rights of the other members of the family, it is possible to have the share alienated allotted to the alienor, it may be allotted to the alienee in the right of the alienor. If, however, the alienation is made by a father or manager which is supported by legal necessity such alienation has to be upheld." Learned standing counsel urged that neither there is any evidence that the gift was made with the consent of other coparceners nor is there any question of its having been made for any legal necessity. According to him, this cannot be for pious purpose as well. In support of this contention, he placed reliance on the judgment of the Supreme Court in the case of Ammathayee alias P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter. It is not possible to lay down a hard and fast rule, prescribing the quantitative limits of such a gift as that would depend on the facts of each case and it can only be decided by courts, regard being had to the overall picture of the extent of the family estate, the number of daughters to be provided for and other paramount charge and other similar circumstances." On that view, the gift made in that case was upheld because it was within a reasonable limit and for a pious purpose. From the judgment appears that the gift was also in respect of immovable property and perhaps because of that test about the pious purpose had to be fulfilled. Now, it is almost settled that a father can make a gift of ancestral movable property wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f movable property ". The case with which we are concerned, the gift related to movable property. If it is held to be within reasonable limit then certainly the assessee could have made the gift in question in favour of his son out of love and affection. In the case of S. Raghbir Singh Sandhawalia v. CIT [1958] 34 ITR 719 (Punj), a Bench of the Punjab High Court upheld a gift of sum of Rs. 2,40,000 representing the paid up value of 300 shares in favour of the wife of the assessee as a gift of movable property out of love and affection. It was also held to be within reasonable limits because the assessee possessed properties of several millions of rupees. Similar view was expressed by a Bench of the Allahabad High Court in the case of Juga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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