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TMI Blog1971 (9) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be a transfer of property in some way. This conclusion of ours gets support from sub-clauses (a) to (c) of clause (xxiv) of section 2, each of which deals with one or the other mode of transfer. If Parliament intended to bring within the scope of that provision partitions of the type with which we are concerned, nothing was easier than to say so. In interpreting tax laws, courts merely look at the words of the section. If a case clearly comes within the section, the subject is taxed and not otherwise. We agree with the view taken by the High Court of Madras, the Tribunal and the Appellate Assistant Commissioner that the assessee made no "gift" under the partition deed in question. - - - - - Dated:- 16-9-1971 - Judge(s) : K. S. HEGDE., A. N. GROVER JUDGMENT The judgment of the court was delivered by HEGDE J.-Both these appeals by the Commissioner of Gift-tax arise from the same judgment. The former one is by certificate and the latter by special leave. Civil Appeal No. 1341 of 1971 came to be filed because the certificate given by the High Court not being supported by any reason, the appeal brought on the strength of that certificate (Civil Appeal No. 128 of 1969) bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that as no member of an undivided Hindu family had a definite share in the family assets, on partition, when the joint enjoyment came to an end, there was no need to have arithmetical equality between the shares of the various coparceners. He, accordingly, held that the assessee was not liable to pay any gift-tax in respect of the properties that fell to the shares of his son and grandsons. The department appealed against this decision to the Tribunal. It was contended before the Tribunal that the transaction in question came within section 2(xii) and section 2 (xxiv) ; in particular it came within clause (d) of section 2(xxiv), as property included any interest in property and partition constituted a transaction ; the assessee had, by relinquishing a portion of what was his due, transferred such interest and properties in favour of the other members of the family for no consideration and, consequently, the gift-tax was properly leviable. This contention was not accepted by the Tribunal. It held that the interest that the assessee had in his Hindu undivided family property was not definable, and, therefore, section 2(xxiv) was not attracted to the facts of the case. The Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, it is not necessary for us to consider what would be the position in law if there was first a division of status in a Hindu undivided family and the same was followed up by division by metes and bounds in which division one of the coparceners takes properties less than what he is entitled to under law. Before proceeding to examine the relevant provisions of the Act, it is necessary to mention that according to the true notion of an undivided Hindu family, no individual member of that family, whilst it remains undivided, can predicate of the joint and undivided property, that he, at particular member, has a certain definite share, namely, a third or a fourth. All the coparceners in a Hindu joint family are the joint owners of the properties of the family. So long as the family remains joint, no coparcener can predicate what his share in the joint family is. His share gets determined only when there is a division of status or a division by metes and bounds. Therefore, it is not correct to assume that a coparcener in Hindu joint family has any definite share in the family property, before its division. Having stated that much, let us now proceed to consider the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer in the strict sense ? We are of the opinion that it is not. This was so held in Gutta Radhakrishnayya v. Gutta Sarasamma. Subba Rao J. (then a judge of the Madras High Court), after examining several authorities, came to the conclusion that 'partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in severalty. Each one of the sharers had an antecedent title and, therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary.' The Madras High Court again examined the question in M. K. Stremann v. Commissioner of Income-tax, with reference to section 16(3)(a)(iv). It observed that obviously no question of transfer of assets can arise when all that happens is separation in status, though the result of such severance in status is that the property hitherto held by the coparcenary is held thereafter by the separated members as tenants-in-common. Subsequent partition between the divided members of the family does not amount either to a transfer of assets from that body of the tenants-in-common to each of such tenants-incommon.' The Punjab High Court came to the same conclusion in Jagan Nath v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ", in the context, means giving away or giving up by a person of something which was his own, "conveyance" means transfer of ownership, "assignment" means the transfer of the claim, right or property to another, "settlement" means settling the property, right or claim--conveyance or disposition of property for the benefit of another "delivery" contemplated therein is the delivery of one's property to another for no consideration and "payment" implies gift of money by someone to another. We do not think that a partition in a Hindu undivided family can be considered either as "disposition" or "conveyance" or "assignment" or "settlement" or "delivery" or "payment" or "alienation" within the meaning of those words in section 2(xxiv). This leaves us with clause (d) of section 2(xxiv) which speaks of a transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of another person. A member of a Hindu undivided family who, as mentioned earlier, has no definite share in the family property before division, cannot be said to diminish directly or indirectly the value of his property or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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