Law:

Section:

Section 5(1)(viii) of the Gift-tax Act, 1958 - Gift - Exemption of - Assessment year 1966-67 - Whether a gift made by a person who is manager of a joint family to his wife, even of a portion of property belonging to family is a gift by said person to his spouse within meaning of section 5(1)(viii) -Held, yes FACTS H was the karta of assessee HUF. During the relevant accounting year he made some cash gift from the funds of assessee to his wife, and claimed exemption under section 5(1)(viii). The GTO disallowed the assessee's claim. However, on appeal, the AAC allowed the appeal and held that the gift by the karta to his wife was exempted under the provisions of section 5(1)(viii). On appeal by the revenue, the Tribunal upheld the order of the AAC. On reference: HELD It might be that H was the karta of the HUF and was assessed as such, but the fact remained that out of the funds of the HUF, he made a gift to his wife. This was clear from the statement of the case and also from the order of the Tribunal. It was significant that before the Tribunal, it was not urged by the department that the gift was not made by H as an individual but as HUF. The description of H as karta was therefore, besides the point. In any event, the view that the Tribunal took of the matter, was fully justified. Note - The case has been decided in favour of the assessee. CASES REFERRED TO Jana Veera Bhadrayya v. CGT [1966] 59 ITR 176 (AP) and Vadrevu Venkappa Rao v. CGT [1974] 95 ITR (AP) (App.). JUDGMENT D.K. Mahajan, J.-The Income-tax Appellate Tribunal has stated the following question of law for our opinion: "Whether a gift made by a person who is the manager of a joint Hindu family to his wife of a portion of the property belonging to the family is a gift by a person to his spouse within the meaning of section 5(1)(viii) of the Gift-tax Act?" The facts are simple. The assessee is a Hindu undivided family and Shri Hari Chand is its karta. The assessment year in question is 1966-67, the previous year being Samvat year 2023. During the assessment year, Hari Chand made a gift of Rs. 49,000 from the funds of the Hindu undivided family to his wife, Sunder Shanta, and a further gift of Rs.…

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