Law:

Section:

Section 2(xviii) , read with section 3, of the Gift-tax Act, 1958 - Person - Assessee and her sister had half share each in some properties received under will of their mother - They gifted those properties to their brother by means of a single gift deed - GTO assessed assessee as an AOP - Whether donors were holding those properties as tenants-in-common and not as joint tenants and, hence, they made gift in that capacity - Held, yes - Whether each one must be held to have made a gift of her share of property though gift was made through one single document and, therefore, assessee could be assessed only as individual - Held, yes FACTS The assessee and her sister had half share each in some properties received under a will of their mother. They in turn gifted the properties to their brother by means of a single gift deed. The GTO assessed the assessee as an AOP which was affirmed by the Tribunal on further appeal. On reference, the High Court, differing with the Tribunal's conclusions, held that the assessee could only be assessed as individuals. On appeal before the Supreme Court. HELD In law each one of them had half the right in the property that they gifted to their brother. They were holding that property as tenants-in-common and not as joint tenants. Hence they made the gift as tenants-in-common and not as joint tenants. Each one must be held to have made a gift of her share of the property though the gift was made through one single document. The Act did not change the general law relating to the rights of property. It merely sought to tax a gift of the property owned by a person. Thus, the High Court was absolutely right in holding that the assessees, could only be assessed as individuals. The case was decided in favour of assessee. CASE REVIEW The decision of the High Court is reported as R. Valsala Amma v. Commissioner of Gift-tax [1969] 72 ITR 579 affirmed. JUDGMENT Hegde, J.-Civil Appeal No. 1436 (NT)/71 is by special leave and Civil Appeal No. 1237 of 1969 is by certificate. The latter appeal has become infructuous because the certificate by which it was brought is not supported by any reason. Hence, the appellant had to apply and obtain special…

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