{"id":255788,"date":"1970-05-05T00:00:00","date_gmt":"1970-05-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/goli-eswariah-vs-commissioner-of-glft-tax-andhra-on-5-may-1970"},"modified":"2015-08-18T09:26:41","modified_gmt":"2015-08-18T03:56:41","slug":"goli-eswariah-vs-commissioner-of-glft-tax-andhra-on-5-may-1970","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/goli-eswariah-vs-commissioner-of-glft-tax-andhra-on-5-may-1970","title":{"rendered":"Goli Eswariah vs Commissioner Of Glft Tax, Andhra … on 5 May, 1970"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Goli Eswariah vs Commissioner Of Glft Tax, Andhra … on 5 May, 1970<\/div>\n
Equivalent citations: 1970 AIR 1722, 1971 SCR (1) 522<\/div>\n
Author: K Hegde<\/div>\n
Bench: Hegde, K.S.<\/div>\n
           PETITIONER:\nGOLI ESWARIAH\n\n\tVs.\n\nRESPONDENT:\nCOMMISSIONER OF GlFT TAX, ANDHRA PRADESH\n\nDATE OF JUDGMENT:\n05\/05\/1970\n\nBENCH:\nHEGDE, K.S.\nBENCH:\nHEGDE, K.S.\nSHAH, J.C.\n\nCITATION:\n 1970 AIR 1722\t\t  1971 SCR  (1) 522\n 1970 SCC  (2) 390\n CITATOR INFO :\n RF\t    1977 SC2230\t (17)\n\n\nACT:\nGift  Tax  Act<\/a>\t18  of\t1958,  s.  2(xxiv)<\/a>  (d)-Transfer  of\nproperty-Hindu throwing separate property into joint  family\nstock-His  act whether amounts to 'transaction'\t within\t the\nmeaning\t of  sub-cl.  (d)-Whether amounts  to  'transfer  of\nproperty' liable to be treated as 'gift' under ss. 2(xii)  &\n4(a)  of the Act-Word 'disposition' in s.  2(xxiv)<\/a>,  meaning\nof.\n\n\n\nHEADNOTE:\nThe  appellant owned certain self-acquired properties  which\nby  a deed dated December 9, 1957 he threw into\t the  common\nstock of his Hindu Joint Family.  The Gift Tax Officer\theld\nthat he had thereby made it gift taxable under the Gift\t Tax\nAct<\/a>,  1958.  After proceedings before the authorities  under\nthe  Act  the  question\t whether  the  appellant  had\tmade\n'transfer'  of the property so as to attract the  provisions\nof the Act was referred to the High Court of Andhra Pradesh.\nFollowing its earlier decision in Satyanarayanamurthy's case\nthe High Court held that the act of' the appellant  amounted\nto a 'transfer' within-the terms of s. 2(xxiv)(d)<\/a> of the Act\nand therefore was a gift such as envisaged in s. 2(xii)<\/a>\t and\ns.   4(a)  of  the  Act.   In\tSatyanarayanamurthy's\tcase\naforesaid,  it had been held that an act similar to that  of\nthe appellant would amount to \"a 'transaction' entered\tinto\nby  any person with intent thereby to diminish\tdirectly  or\nindirectly the value of his own property and to increase the\nvalue of the property of any other person\". With certificate\nappeal\tagainst the judgment of the High Court was filed  in\nthis Court.\nHELD:The  appeal  must be allowed since the  declaration  by\nwhich  the  assessee had impressed the\tcharacter  of  joint\nHindu family property on the self-acquired properties  owned\nby  him\t did  not amount to a transfer'\t so  as\t to  attract\nprovisions of the Act, [529 F]\nA  Hindu  Joint Family is not a creature of  contract.\t The\ndoctrine of throwing into common stock inevitably postulates\nthat  the owner of the separate property is a copartner\t who\nhas  an interest in the coparcenary property and desires  to\nblend  his separate property with the coparcenary  property.\nThe  separate property of a member of a joint  Hindu  Family\nmay be impressed with the character of Joint Family property\nif  it\tis voluntarily thrown by him into the  common  stock\nwith the intention of abandoning his separate claim therein.\nThe act by which the coparcener throws his separate property\nto the common stock is a unilateral act.  By his  individual\nvolition he renounces his individual right in that  property\nand  treats it as a property of the family.  As soon  as  he\ndeclares  his intention to treat his self acquired  property\nas  that  of  the Joint Family,\t the  property\tassumes\t the\ncharacter  of  Joint  Family  Property.\t  The  doctrine\t  of\nthrowing  into\tcommon stock is a doctrine peculiar  to\t the\nMitakshara  School of Hindu Law.  When a  coparcener  throws\nhis  separate  property into common stock he makes  no\tgift\nunder  Ch.  VII of the Transfer of Property Act.  In such  a\ncase  there  is no donor or done.  Further  no\tquestion  of\nacceptance  of\tthe property thrown into  the  common  stock\narises. [526 A-F]\n523\nIt was not necessary in the present case to consider whether\nthe  act of the assessee could be said to  have\t \"diminished\ndirectly  or indirectly the' value of his own  property\t and\nincreased  the value of the property\" of his  joint  family,\nbecause\t his act could not he considered as  a\t\"transaction\nentered\t into\".\t  Clause (d) of s.  2(xxiv)<\/a>  contemplates  a\n\"transaction  entered into\" by one person with another.\t  It\ncannot apply to a unilateral act. it must be an act to which\ntwo or more persons are parties.  Even though under the\t Act\nthe  undivided\t'family is a 'person' the assessee  did\t not\nenter  into any transaction with his family.  Therefore,  it\nwas  not possible to agree with the High Court that the\t act\nof  the assessee fell within the scope of s. 2(xxiv)<\/a> (d)  of\nthe Act. [528 A-B]\nThe  assessee's\t act  could  also not  be  considered  as  a\n'disposition'  under the main part of s. 2(xxiv)<\/a>.  The\tword\n'disposition'  is  not\ta term of law.\tFurther\t it  has  no\nprecise\t meaning.  Its meaning has to be gathered  from\t the\ncontext\t in which it is used.  In the context in  which\t the\nterm  is used in s. 2(xxiv)<\/a>, it cannot mean to \"dispose\t of.\nOtherwise,  even if a man abandons or destroys his  property\nit would become a \"gift\" under the Act.\t That could not have\nbeen  the intention of the Legislature.\t In s.\t2(xxiv)<\/a>\t the\nword  'disposition'  is used along with\t words\t\"conveyance,\nassignment,   settlement,   delivery,\tpayment\t  or   other\nalienation of property\".  It is clear' from the context that\nthe  word  'disposition' therein refers to  a  bilateral  or\nmultilateral  act.  It does not refer to a  unilateral\tact.\n[528 D-F]\nMallesappa  Bandeppa Desai & Ors. v, Desai Mallappa  &\tOrs.\n[1961] 3 S.C.R. 779, Grimwade & Ors. v. Federal Commissioner\nof  Taxation,  78 C.L.R. 199,  Commissioner  of\t Income-tax,\nMadras v. M. K. Stremann<\/a>, 56 I.T.R. 62 and M. K. Stremann v.\nCommissioner of Income-tax<\/a>, 41 I.T.R. 297, applied.\nCommissioner of Gift Tax, Madras v. P. Rangaswami Naidu T.C<\/a>.\n272  of\t 1964  :  R. S. R.  M.\tRamaswami  Chettiar  v.\t The\nCommissioner  of Gift Tax, Madras<\/a>.  Tax Case No.10 of  1966,\nDr.  A. R. Shukla v. Commissioner of Gift Tax, Gujarati<\/a>,  74\nI.T.R.\t167  and  Smt.\tLaxmibai Narayana  Rao\tNerlekar  v.\nCommissioner of Gift-tax<\/a>, 65, I.T.R. 19, approved.\nCommissioner\t of    income-tax,    Hyderabad\t   v.\t  C.\nSatyanarayanamurthy,  56  I.T.R. 353, G. V. Krishna  Rao,  &\nOrs. v. First Addl.  Gift Tax Officer, Guntur, 70 I.T.R. 812\nand  Commissioner  of Gift Tax v. Jagdish Saran<\/a>,  75  I.T.R.\n529, disapproved.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeal No, 695 of 1968.
\nAppeal from the judgment and order dated October 13, 1966 of
\nthe  Andhra  Pradesh High Court in Case Referred No.  74  of
\n1963.\n<\/p>\n
N.   A.\t  Palkhivala  and  T.  A.  Ramachandran,   for\t the
\nappellant.\n<\/p>\n
B.   Sen, G. C. Sharma, R. N. Sachthey and B, D. Sharma, for
\nthe respondent.\n<\/p>\n
M.-C.  Chagla, M. Shankar and K. Jayaram, for  interveners
\nNos.  1 and 2.\n<\/p>\n
5 2 4
\nN.   D.\t Karkhanis and T. A. Ramachandran,  ‘for  intervener
\nNo. 3.\n<\/p>\n
The Judgment of the Court was delivered by
\nHegde,\tJ.  This  appeal  by  certificate  arises  from\t the
\njudgment  of the Andhra Pradesh High Court rendered  in\t its
\nadvisory  jurisdiction\ton a case stated by  the  Income-tax
\nAppellate  Tribunal, Hyderabad Bench under s. 26(1)<\/a>  of\t the
\nGift-tax  Act,\t1958 (to be hereinafter referred to  as\t the
\n‘Act’).\t  The question referred for the opinion of the\tHigh
\nCourt was :\n<\/p>\n
\t      “Whether the declaration by which the assessee
\n\t      has  impressed  the character of\tjoint  Hindu
\n\t      family\tproperty   on\tthe    self-acquired
\n\t      properties owned by him amounts to a  transfer
\n\t      so  as to attract the provisions of the  Gift-
\n\t      tax Act.”\n<\/p><\/blockquote>\n
The   High   Court  following  its   earlier   decision\t  in
\nCommissioner\t,of    Income-tax,    Hyderabad\t   v.\t  C.
\nSatyanarayanamurthy<\/a>(1);\t ,answered  that  question  in\t the
\naffirmative.\n<\/p>\n
The  material facts as could be gathered from the  statement
\nof the case submitted to the High Court are as follows :
\nThe  assessee  is  the\tkarta  of  his\tjoint  family.\t The
\nassessment year with which we are concerned in this case  is
\n1959-60,   for\twhich  the  “previous  year”  is  the\tyear
\ncommencing  on 23-10-1957 and ,ending on 10- 11- 1958.\t The
\nassessee  owned movable and immovable properties which\twere
\nhis self acquisitions.\tBy a deed dated December 9, 1957, he
\nthrew  into  the  common  stock\t his  houses  bearing\tNos.
\n6658-5-9- and 2731 situate at Imamba vidi, Secunderabad\t and
\na  cash\t deposit of Rs. 1,50,000 in the firm of\t M\/s.\tGoli
\nEswariah,  Paper Merchants, Secunderabad.  In the  books  of
\naccount\t  of   the  firm,  necessary   entries\t were\tmade
\ntransferring  the amount to the account a the  family.\t The
\nGift-tax  Officer treated that portion of the value  of\t the
\nproperties so blended in which the assessee ceased to have a
\nright  on partition of the family as having been  gifted  by
\nhim  to\t the  family.  He rejected  the\t contention  of\t the
\nassessee  that\this  act  of  throwing\this  self   acquired
\nproperties  into the common stock did not amount to  a\tgift
\nunder\tthe  Act.   In\tappeal,\t the   Appellate   Assistant
\nCommissioner  took the view that since the deed in  question
\nwas  not registered, there was no transfer of the  immovable
\nproperties  to the family and as such there was no  gift  of
\nthe two houses mentioned earlier but with regard to the\t sum
\nof Rs. 1,50,000, he considered it as a gift and\t accordingly
\nheld that 3\/4th of it was liable to be taxed under
\n(1)  56 I.RT.R. 353.\n<\/p>\n
\t\t\t    525<\/span><\/p>\n
the provisions of the Act.  Thereafter the matter was  taken
\nup  in\tappeal to the tribunal.\t The tribunal by  its  order
\ndated  November\t 17,  1961 held that the act  by  which\t the
\nassessee  threw his self acquired properties to\t the  family
\nhotchpot did not amount to a transfer- and hence it need not
\nhave  been  effected by a registered document.\t It  further
\nheld  that  where  the\tcopartner  threw  himself   acquired
\nproperties into the hotchpot of the joint family, there\t was
\nno  element  of\t transfer within the meaning of\t s.  2<\/a>,\t cl.
\n(xxiv)\tsub-cl.\t (d)  of the Act.  At the  instance  of\t the
\nCommissioner,Gift-tax, Andhra Pradesh, the tribunal stated a
\ncase  for the opinion. of the High Court and  submitted\t the
\naforementioned question for its opinion.  The High Court did
\nnot examine the question of law arising for decision  afresh
\nas  it was bound by the earlier decision of that High  Court
\nin    Commissioner    of    Income-tax,\t   Hyderabadv.\t  C.
\nSatyanarayanamurthy(1)\twherein\t that court  had  held\tthat
\nwhere  a  Hindu by a declaration has impressed on  his\tself
\nacquired  property the character of joint  family  property,
\nthe same would-. amount to a transfer of property within the
\nterms of s. 2<\/a> (xxiv) (d) and as such is a gift as  envisaged
\nin  s. 2(xii)<\/a> and s. 4(a)<\/a> of the.  Act.\t The view  taken  in
\nthat  case was that an act similar to the one we are  called
\nupon   to  consider  in\t this  case  would  amount   to,   a
\n“‘transaction’\tentered\t into  by  any\tperson\twith  intent
\nthereby to diminish directly or indirectly the value ‘of his
\nown  property and to increase the value of the\tproperty  of
\nany other person.”\n<\/p>\n
On  the question of law that we are required to,  decide  in
\nthis  case, there is a sharp cleavage of  judicial  opinion.
\nThe  Andhra,  Pradesh  High Court in the  case\treferred  to
\nearlier\t as well as in G. V. Krishna Rao and Ors.  v.  First
\nAdditional  Gift-tax<\/a>  officer, Guntur(1) and  the  Allahabad
\nHigh Court in Commissioner of Gift-tax v. Jagdish Saran<\/a> (  3
\n)  have\t taken the view that when a coparcener\tin  a  Hindu
\nUndivided  Family governed by Mitakshara School\t throws\t his
\nself  acquired\tproperties  into common\t stock.\t the,.\tsame
\namounts\t to  a ‘gift’ under the Act.  On the other  hands  a
\nfull bench of the Madras High Court in Commissioner of Gift-
\ntax,  Madras  v.  P.  Rangasami Naidu<\/a>(4)  and  VR.   S.\t RM.
\nRamaswami   Chettiar  v.  The  Commissioner   of   Gift-tax,
\nMadras<\/a>(,), a full bench of the Gujarat High Court in Dr.  A.
\nR.  Shukla  v.\tComnzissioner  of  Gift-tax,  Gujarat<\/a>(“);  a
\ndivision bench of the Kerala High Court in P. K.  Subramania
\nlyer  v. Commissioner of Gift-tax, Kerala(1) and a  division
\nbench  of the Mysore High Court in Smt.\t  Laxmibai  Narayana
\nRao  Nerlekar  v. Commissioner of  Gift-tax<\/a>(8)\thavetaken  a
\ncontrary view.\n<\/p>\n
(1)  56\t I.T.R. 353.\t\t\t     (2)  70  I.T.R.\n<\/p>\n
812.
\n     (3)  75 I.T.R. 529.(4)Tax Case 272 of 1964′..
\n     (5)  Tax Case No. 10 of 1966.(6)74 I.T.R. 167.
\n     (7)  67 I.T.R. 612.(8)65 I.T.R. 19.\n<\/p>\n
526<\/span><\/p>\n
To  pronounce  on  the question of  law\t presented  for\t our
\ndecision,  we must first examine what is the true  scope  of
\nthe doctrine of throwing into the ‘common stock’ or  ‘common
\nhotchpot.  It must-be\t remembered  that a Hindu family  is
\nnot a creature of a contract.As\t   observed by this Court in
\nMallesappa Bandeppa Desai and Ors. v.\tDesai  Mallappa\t and
\nOrs<\/a>.(1)\t that  the doctrine of throwing\t into  common  stock
\ninevitably postulates that the owner of a separate  property
\nis  a  coparcener, who has an interest\tin  the\t coparcenary
\nproperty  and desires to blend hi-, separate  property\twith
\nthe coparcenary property.  The existence of a coparcenary is
\nabsolutely necessary before a coparcener can throw into\t the
\ncommon\tstock  ‘his self acquired  properties  The  separate
\nproperty  of  a\t member\t of a  joint  Hindu  family  may  be
\nimpressed with the character of joint family property if  it
\nis voluntarily thrown by him into the common stock with\t the
\nintention’  of abandoning his separate claim  therein.\t The
\nseparate  property  of\ta  Hindu ceases\t to  be\t a  separate
\nproperty  and acquires the characteristic of a joint  family
\nor  ancestral property not by any physical mixing  with\t his
\njoint  family  or ‘his ancestral property but  by  his,\t own
\nvolition  and intention by his waiving and surrendering\t his
\nseparate  rights  in it as separate property.\tThe  act  by
\nwhich  the  coparcener throws his separate property  to\t the
\ncommon stock ‘is a unilateral act.  There is no question  of
\neither\tthe  family  rejecting\tor  accepting  it.   By\t his
\nindividual  volition  he renounces his individual  right  in
\nthat property and treats it as a property of the family.  As
\nsoon  as  he  declares\t‘his intention\tto  treat  his\tself
\nacquired property as that of the joint family, the  property
\nassumes\t the  character\t of  joint  family  property.\t The
\ndoctrine  of  throwing into the common stock is\t a  doctrine
\npeculiar  to  the Mitakshara School of Hindu  law.   When  a
\ncoparcener  throws  his separate property  into\t the  common
\nstock, he makes no gift under Chapter VII of the Transfer of
\nProperty  Act.\tIn such a case there is no donor  or  donee.
\nFurther\t no  question of acceptance of the  property  thrown
\ninto the common stock arises.\n<\/p>\n
Bearing in mind the true nature of the doctrine of throwing
\ninto  the common hotchpot, we shall now proceed\t to  examine
\nthe  relevant  provisions of the, Act to  ascertain  whether
\nthe act of the assessee\t can be considered as a\t gift  under
\nthe Act.\n<\/p>\n
Section 3<\/a> is the charging section.  It provides that subject
\nto the\t  other-provisions contained in the Act, there shall
\nbe charged for every assessment year commencing on and\tfrom
\nthe  1\tSt day of April, 1958, a tax known as  gift  tax  in
\nrespect\t of the gifts, if any, made by a person\t during\t the
\nprevious year (other than gifts made
\n(1)  [1961] 3 S.C.R.770.\n<\/p>\n
5 2 7
\nbefore\tthe  1st  day of April 1957) at the  rate  or  rates
\nspecified in the Schedule.  Gift is defined in s. 2(xii)<\/a>  as
\nfollows :\n<\/p>\n
\t      ”\t “gift” means the transfer by one person  to
\n\t      another  of any existing movable or  immovable
\n\t      property\t made\tvoluntarily   and    without
\n\t      consideration  in money or money’s worth,\t and
\n\t      includes\tthe transfer of any property  deemed
\n\t      to ‘be a gift under section 4<\/a>“.\n<\/p><\/blockquote>\n
In  this  case\twe  are not  dealing  with  a  deemed  gift.
\nTherefore we need not consider the scope of s. 4<\/a>. Before  an
\nact can be considered as a gift as defined, there must be  a
\ntransfer of property by one person to another.\t‘Person’  is
\ndefined\t as  including\ta  Hindu  Undivided  Family  in\t  s.
\n2(xviii)<\/a>.   Section 2(xxiii)<\/a> says that\t‘property’  includes
\nany  interest  in property,  movable  and  immovable.Section
\n22(xxiv)<\/a> defines “transfer of property” thus :\n<\/p>\n
\t      “Transfer of property” means any\tdisposition,
\n\t      conveyance, assignment, settlement,  delivery,
\n\t      payment  or other alienation of property\tand,
\n\t      without\tlimiting  the.\tgenerality  of\t the
\n\t      foregoing includes.-\n<\/p><\/blockquote>\n
\t      (a)   the creation of a trust in property;\n<\/p><\/blockquote>\n
\t      (b)   the\t grant\tor creation  of\t Any  lease,
\n\t      mortgage,\t charge, easement,  licence,  power,
\n\t      partners hip or interest in property;\n<\/p><\/blockquote>\n
\t      (c)   the\t exercise of a power of\t appointment
\n\t      of  property.-vested  in any person,  not\t the
\n\t      owner  of\t the  property,\t to  determine\t its
\n\t      disposition in favour of any person other than
\n\t      the donee of the power-, and\n<\/p><\/blockquote>\n
\t      (d)   any\t transaction  entered  into  by\t any
\n\t      person   with  intent  thereby   to   diminish
\n\t      directly\tor indirectly the value of  his\t own
\n\t      property\tand  to increase the  value  of\t the
\n\t      property of any other person.”\n<\/p><\/blockquote>\n
The  High Court relied on s. 2<\/a> (xxiv) (d) in  answering\t the
\nquestion  referred to it in favour of the Revenue.  It\tcame
\nto the conclusion that the act of the, assessee in  throwing
\nhis self-acquired properties into the common stock  amounted
\nto “a transaction entered into by him with intent thereby to
\ndiminish  directly  or\tindirectly  the\t value\tof  his\t own
\nproperty  and to increase the value of the property  of\t any
\nother  person”.\t It is true that the assessee  ‘by  throwing
\nhis self-acquired property into the common stock gave up his
\nexclusive  right  in that property and in its place  he\t was
\ncontent to own that property jointly with the other  members
\nof his family.\tWe do not think that it is necessary in this
\ncase to consider whether the act of the assessee can be said
\nto have “diminished
\n5 28
\ndirectly  or  indirectly the value of his own  property\t and
\nincreased  the\tvalue of the property” of his  joint  family
\nbecause\t in our opinion that act cannot be considered  as  a
\n“transaction  entered  into”.\tClause\t(d)  of\t s.  2(xxiv)<\/a>
\ncontemplates a “transaction entered into” by one person with
\nanother.   It cannot apply to a unilateral act.\t It must  be
\nan act to which two or more persons are parties.  It is true
\nthat  for the purpose of the Act, a Hindu  Undivided  Family
\ncan  be considered as a “person”.  But the assessee did\t not
\nenter  into any transaction with his family.   Therefore  we
\nare unable to agree with the High Court that the act of\t the
\nassessee  fell\twithin the scope of S. 2<\/a> (xxiv) (d)  of\t the
\nAct.\n<\/p>\n
Section 2<\/a>(xxiv(d) is similar to Paragraph (f) of S. 4 of the
\nAustralian Gift Duty Assessment Act, 1941-42.\tInterpreting
\nthat section in Grimwade and Ors. v. Federal Commissioner of
\nTaxation(1),  the High Court of Australia observed that\t the
\ntransaction  by\t a  person referred to\ttherein\t must  be  a
\ntransaction  with some other person and that it cannot be  a
\nunilateral act.\n<\/p>\n
Mr.  B.\t Son, learned Counsel for the  department  contended
\nthat  the said act should be considered as  a  ‘disposition’
\nunder the main part of S. 2<\/a> (xxiv).  The word  ‘disposition’
\nis  not a term of law.\tFurther it has no  precise  meaning.
\nIts meaning has to be gathered from the context in which  it
\nis  used.  In the context in which that term is used  in  S.
\n2(xxiv)<\/a>, it cannot mean to ‘dispose of’.  Otherwise even  if
\na  man abandons or destroys his property, it would become  a
\n‘gift’\tunder  the  Act.   That\t could\tnot  have  been\t the
\nintention  of  the  legislature.  In S.\t 2(xxiv)<\/a>,  the\tword
\n‘disposition’\tis  used  along\t with\twords\t“conveyance,
\nassignment,   settlement,   delivery,\tpayment\t  or   other
\nalienation of property.” Hence it is clear from the  context
\nthat the word ‘disposition’ therein refers to a bilateral or
\na multi-lateral act.  It does not refer to a unilateral act.
\nIn  this  connection reference may be usefully made  to\t the
\ndecision of this Court in Commissioner of Income-tax, Madras
\nv. M. K. Stremann<\/a>(2).  Therein the assessee first threw\t his
\nprivate\t properties  into the common  stock  and  afterwards
\nthere  was  a partition amongst the members  of\t the  family
\nwhich  included\t his two minor sons and\t a  minor  daughter,
\nrepresented by their mother.  The question arose whether the
\npartition  in question amounted to a transfer of  assets  by
\nthe  assessee to the three minor children so as’ to  attract
\nthe provisions of s. 16(3)<\/a> (a) (iv) of the Indian Income-tax
\nAct<\/a>,  1922.   In that case, the Revenue did not\t contend  in
\nthis Court that the act of the assessee throwing into common
\nstock  his self acquired properties amounted to transfer  of
\nassets by the assessee to his three minor children.  On\t the
\nother hand, ,it contended that the partition that took place
\nsubsequently  amounted\tto  a  transfer\t of  assets  of\t the
\nassessee to his minor child-\n<\/p>\n
(1) 78 C.L.R. 199.\n<\/p>\n
(2) 56 I.T.R. 62.\n<\/p>\n
5 2 9
\nren.   This  Court overruled that contention.\tTherein\t the
\ncontention of the Revenue appeared to have proceeded on\t the
\nbasis that the antecedent act of the assessee viz.  throwing
\nhis  self-acquired  properties to the common stock  may\t not
\namount to a transfer of his assets to his minor children but
\nthe partition that followed amounted to such a transfer.  In
\nthat very case the Revenue appears to have contended  before
\nthe High Court that the act of the assessee in throwing\t his
\nself  acquired\tproperties into common stock amounted  to  a
\ntransfer  of  his assets to his minor  children.   The\tHigh
\nCourt  observed that when the separate property of a  copar-
\ncener  ceases to be his separate and becomes impressed\twith
\nthe character of coparcenary property, there is no  transfer
\nof that property from the coparcener to the coparcenary;  it
\nbecomes\t joint\tfamily property because the  coparcener\t who
\nowned  it  until then as his separate property, has  by\t the
\nexercise of his volition, impressed it with the character of
\njoint  family  or coparcenary property, to be  held  by\t him
\nthereafter  alongwith other members of the joint family;  it
\nis  by his unilateral action that the property became  joint
\nfamily property; the transaction by which a property  ceased
\nto be the property of a coparcener and became impressed with
\nthe character of copes property, does not itself amount to a
\ntransfer;  no  transfer\t need  precede\tthe  change  and  no
\ntransfer ensues either-see M. K. Stremann v. Commissioner of
\nIncome-tax,  Madras<\/a>(1).\t  We  are in  agreement\t with  those
\nfindings.\n<\/p>\n
For  the reasons mentioned above, we allow this appeal,\t set
\naside the judgment of the High Court and answer the question
\nreferred to the High Court thus :–\n<\/p>\n
The declaration by which the assessee has impressed the cha-
\nracter\tof joint Hindu family property on the  self-acquired
\nproperties  owned by him did not amount to a transfer so  as
\nto attract the provisions of the Act.  The Revenue shall pay
\nthe costs of the appellant in this appeal.
\nG.C.\n<\/p>\n
Appeal allowed.\n<\/p>\n
(1) 41 1. T.R. 297.\n<\/p>\n
L 13 Sup.  Cl\/70-5
\n530<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Goli Eswariah vs Commissioner Of Glft Tax, Andhra … on 5 May, 1970 Equivalent citations: 1970 AIR 1722, 1971 SCR (1) 522 Author: K Hegde Bench: Hegde, K.S. PETITIONER: GOLI ESWARIAH Vs. RESPONDENT: COMMISSIONER OF GlFT TAX, ANDHRA PRADESH DATE OF JUDGMENT: 05\/05\/1970 BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. SHAH, J.C. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-255788","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nGoli Eswariah vs Commissioner Of Glft Tax, Andhra ... on 5 May, 1970 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/goli-eswariah-vs-commissioner-of-glft-tax-andhra-on-5-may-1970\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Goli Eswariah vs Commissioner Of Glft Tax, Andhra ... on 5 May, 1970 - 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