High Court Of Madras
Deivanaiammal & Ors. vs. Commissioner Of Gift Tax
Asst. Year 1972-73
Sections GT 2(xii), GT 3
R. Jayasimha Babu & Mrs. A. Subbulakshmy, JJ.
Tax Case Nos. 141 & 142 of 1980
2nd November, 1998
R. JAYASIMHA BABU, J. :
These references have been pending in this Court for the last 18 years. The asst. yr. is 1972-73â. There are two references. One at the instance of the assessee and the other at the instance of the Revenue. The questions referred are : .
“1. Whether, on the facts and in the circumstances of the case, the document dt. 15th Sept., 1971, is only a gift deed and not a deed of family arrangement.
Whether, on the facts and in the circumstances of the case, the settlement of certain lands by the assessee to his wife and to his mother to be enjoyed by them for life, was in lieu of maintenance and so the settlement cannot be viewed as without consideration and correspondingly no gift could as inferred from the said transaction.
Whether, on the facts and in the circumstances of the case, no gift-tax could be levied on the value of the life interest conferred by the assessee to his wife and to his mother ?”
The document dt. 1st Sept., 1971, was executed by one Ramasamy Nadar under which a life interest was created in certain lands in favour of his wife and his mother. The assessee contended that the document is a family arrangement and not a gift deed. The GTO held that the document though styled as a partition deed was in fact a gift deed so far as the wife and the mother were concerned. The AAC agreed with the GTO. The legal representatives of the deceased, assessee as also the Department filed appeals before the Tribunal. The Tribunal found, as on 15th Sept., 1971, the settlor Ramasamy Nadar was the sole surviving coparcener that he had his second wife and his mother and two unmarried daughters as on that date. The Tribunal held that the settlement of the properties on the two daughters and their children amount to gift or transfer without consideration and is exigible to gift-tax. So far as the provision for maintenance of second wife and the mother of the settlor, the Tribunal held that only life interest was created in lieu of the pre-existing right to maintenance and it is not an instance for transfer without consideration and did not, therefore, amount to gift.
2. The legal representatives of Ramasamy Nadar sought the reference with regard to the question as to whether the document dt. 15th Sept., 1971, is a gift deed or a deed of family arrangement. After the reference was made, they have not appeared before the Court in person or through counsel. We find from the record that though a counsel had filed Vakalat, on account of certain defects the Vakalat had been returned in the year 1981. Thereafter, the Vakalat was not represented and no one has appeared for them. The document dt. 15th Sept., 1971, has also not been filed along with the statement of case. Under these circumstances, we have no alternative but, to return the reference made at the (sic-instance of) assessee without recording any answer thereto. So far as the questions referred to us at the instance of the Revenue are concerned, we find from a perusal of the order of the Tribunal that the Tribunal is right in its construction of the document under which admittedly the life interest was created in favour of his wife and the mother after the sole surviving coparcener. It is well settled that even though the wife or the mother may not be coparceners in the Hindu joint family, they are entitled to maintenance and the right to such maintenance was not created for the first time by the State but, is an recognised right in them under the Hindu Law. The creation of life interest in their favour in certain lands owned by the sole surviving coparcener to meet their claim for maintenance, therefore, cannot be regarded as a transfer of interest in the immovable property without any consideration. The two questions referred to us at the instance of the Revenue are, therefore, required to be and are answered against the Revenue and in favour of the assessee.
[Citation : 248 ITR 232]