ORDER
T.A. Bukte, Judicial Member
1. G.T.A. No. 1/PN/1988 is revenue’s appeal against the order of the Commissioner-Gift Tax (Appeals), Kolhapur, dated 12-11-1987 on three grounds. All the three grounds of appeal relate to the only one issue whether dedication of gold and silver articles of the value of Rs. 1,35,186 made by the assessee is chargeable as a gift in her hands in view of’the provisions of Section 2(xxiv) read with Section 2(xii) of the Gift-tax Act, 1958.
2. We have heard the learned departmental representative, Mrs. G.V. Samant and the learned counsel for the assessee, Shri B.K. Khare. Mrs. G.V. Samant contended that the view held by the Commissioner of Gift-tax that the dedication of gold and silver articles to the family deity does not amount transfer or in the alternative gift and therefore not chargeable under the Gift-tax provisions in the hands of the assessee is not correct. She supported the order of the Assessing Officer.
3. The learned counsel Shri Khare argued at length. According to him in the transaction of a gift there is an offer and acceptance. The offer is made by the donor and accepted by the donee. It is the bilateral transaction between the donor and the donee. According to Shri Khare there is neither an offer nor an acceptance in the act of dedication. The act of dedication is unilateral act without any donee accepting the offer. He has pointed out. the provisions of Section 4(2) of the Gift-tax Act in this respect. The family deity is not a living person to accept any gift though the property can be dedicated to the family deity which can be held or possessed by any living person. Therefore there is considerable substance in the argument of Shri Khare that in the act of dedication there is no acceptance of the offer and it is unilateral act. Therefore it does not amount to transfer of property or gift and therefore charging the gift in the hands of the assessee does not arise. It is also true that unilateral act does not amount a transfer. In support of the contention of unilateral act Shri Khare has relied on the decision of the Supreme Court in the case of Goli Eswariah v. CGT [1970] 76 ITR 675 wherein the Supreme Court has held that the word “disposition” refers to a bilateral or multilateral act. It does not refer to an unilateral act. He has cited the decision of the Bombay High Court in the case of CGT v. Mrs. Jer Mavis Lubimoff [1978] 114 ITR 90. The Bombay High Court has held in that case that the deed of poll and the document of release did not amount a gift taxable under the Act. In support of a contention that the Hindu family deity is not a living person Shri Khare has relied on the decision of the Allahabad High Court in the case of Ram Kumar Ram Chandra & Co. v. CIT [1965] 58 ITR 721. The Allahabad High Court has held that Hindu deity is not “living” person within the meaning of Section 122 of Transfer of Property Act. It cannot also accept transfer from donor. A dedication in favour of Hindu deity is not, therefore, a gift under the Transfer of Property Act.
4. The Allahabad High Court further observed that the essentials of a Hindu religious endowment are (i) property in respect of which endowment is made must be designated with precision; (ii) the object or purpose of dedication should be clearly indicated and (iii) the founder must completely divest himself of all the beneficial interest in the endowment property. No writing is necessary to create an endowment unless the endowment is to be created by a will. It is not necessary that a trust be created for that purpose nor is a religious ceremony necessary. Allahabad High Court held that the transaction did not amount to a gift, but was Hindu religious endowment in favour of the deity.
5. However, in the present appeal the donor executed an endowment deed and dedicated to the family deity Shri Bhagwan Mahavir (5 gold ornaments and 7 silver ornaments) of the value of Rs. 1,35,186. She also appointed her daughter-in-law as shebait and gave power to her to appoint one or two shebaits as her successors at a time. The property dedicated remained permanently in the hands of the shebait. Whether endowment deed is on record or not but in view of the case law cited above we are of the opinion that there is no gift and the property in question has not continued to be the property of the assessee. Therefore the taxable gift was reduced by the CGT (Appeals) to Rs. 1,35,186. Even logically and on the basis of the terms of the endowment deed coupled with the case law, the view held by the CGT (Appeals) appears to be just and proper. In our opinion, there is no gift chargeable to tax so far the dedication of the gold and silver ornaments are concerned and the property has not remained in the family in perpetuity but it has not remained permanently in the hands of the shebaits.
6. In the result, revenue fails and the appeal is dismissed.
W.T.A.No. 58/PN/1988
7. It is the assessee’s own case that there is no transfer of property either in accordance with the provisions of Transfer of Property Act or Gift-tax Act in the dedication of gold and silver articles to the family deity. If that is so the property has not passed on from hand to hand. An appointment of shebait to look after the management of the family deity does not mean that the assessee’s rights and interest in the property even after dedication have not been extinguished. The property does not remain with the assessee. In this view of the matter there it is wrong to assess it under the Wealth-tax Act as wealth of the assessee.
8. It is not in dispute that the dedication of property is not bona fide. It is also an admitted fact that Hindu deity is a juridical person, assessable as an individual as it holds the property. The properties dedicated under the deed of endowment by the assessee are held and possessed by the family deity through its shebaits. The assessment of such property can be made in the hands of the shebaits. In support of this argument Shri Khare has cited the judgment of the Supreme Court in the case of Jogendra Nath Naskar v. CIT [1969] 74 ITR 33. What is held by the Supreme Court in that case is as follows :
‘The word “individual” in Section 3 of the Indian Income-tax Act, 1922, includes within its connotation all artificial juridical persons and this position is made explicit and beyond challenge in the Income-tax Act, 1961.
A Hindu deity falls within the meaning of the word “individual” in Section 3 and can be treated as a unit of assessment under that section. An assessment to tax can be made on the deity through the shebaits.
The Hindu idol is a juristic entity capable of holding property and of being taxed through its shebaits who are entrusted with the possession and management of its property.
In view of the judgment of the Supreme Court cited above the property held by the family deity is assessable in the hands of the deity as an individual through its shebaits and the department is at liberty to assess it accordingly. In our opinion, the property dedicated by the assessee cannot be said to belong to the assessee or owned by the assessee to bring it to tax under the Wealth-tax Act. In this view of the matter the assessee is entitled to succeed for deleting such property dedicated to the family deity from the wealth-tax assessment.
9. In the result, appellant succeeds and the appeal is allowed.