Madras H.C : A partition between the father and son, made on 18th June, 1972, had been accepted by the Department by an order made under s. 171 of the IT Act, 1961.

High Court Of Madras

Commissioner Of Gift Tax vs. D. Selvaraj

Sections GT 2(xii), 3

Asst. Year 1979-80, 1980-81, 1981-82

R. Jayasimha Babu & K. Gnanaprakasam, JJ.

Tax Cases Nos. 913 to 915 of 1993

2nd March, 2001

Counsel Appeared

Mrs. Chitra Venkataraman, for the Revenue : P.P.S. Janardhana Raja, for the Assessee

JUDGMENT

R. JAYASIMHA BABU, J. :

A partition between the father and son, made on 18th June, 1972, had been accepted by the Department by an order made under s. 171 of the IT Act, 1961. Despite that, gift-tax proceedings were initiated for the asst. yrs. 1979-80, 1980-81 and 1981-82. Those proceedings were rightly set aside in appeal by the CIT(A). The CIT’s finding was confirmed by the Tribunal.

2. The Revenue has chosen to seek a reference with regard to the correctness of the order of the Tribunal. When the Department had itself admitted that the property had belonged to an HUF consisting of the father and the son, and has accepted the partition between the two, it cannot allege that the share allotted to the son, by making appropriate entries in the books of account, amounted to a gift. It is elementary that in an HUF, a coparcener has a right by birth, the son was as much entitled to the property of an HUF as the father was. The division effected between the two would not result in a gift from one to the another.

The question referred to us is answered in favour of the assessee and against the Revenue. The assessee shall be entitled to costs of a sum of Rs. 1,500.

[Citation : 254 ITR 303]

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