Law:

Section:

Section 4, read with section 3, of Gift-tax Act, 1958 – Gift-tax – Deemed gift – Assessment year 1966-67 – ‘M' a Hindu, got converted into Christianity and married a Christian girl – After his death his properties were divided among heirs and M's wife was also given a life estate – ‘M's son, ‘S' having got a share in said partition, improved properties by his own efforts, and a deed of partition was executed in 1966 – GTO and, on appeal, Tribunal took view that document of 1966 amounted to a settlement and consequently gift-tax was attracted – It was seen from records that when ‘S' joined with his children and executed document of 1966, there was no clear statement made that parties to document were governed by Hindu law – All that was stated was that they were living as a family and they were having joint ownership of properties – There was no material produced by assessee to prove that parties who entered into document were governed by principles of Hindu law and properties divided belonged to Joint Hindu Family – Whether, in aforesaid circumstances, Tribunal's conclusion that deed of partition of year 1966, was a deed of settlement liable to gift-tax was valid in law – Held, yes FACTS One ‘M' who was a Hindu, got converted to Christianity and married a Christian lady thereafter. On his death, in 1935 a deed of partition was executed between the heirs and M's wife was also given a life estate. Thereafter, ‘S', M's son who got a share under the deed, improved the properties by his own efforts, and in the year 1966, there was a partition deed executed, without mentioning the religion of the parties thereto, though in the 1935 document M's heirs were described as professing the Christian religion. However, in the 1966 document, it was stated that the parties thereto were living together as a joint family and they were dividing the properties. The Tribunal concluded that the deed of partition of 1966, was a deed of settlement, liable to gift-tax. On reference : HELD Normally, Christians are not governed by Hindu law. If a Hindu gets converted as a Christian, he automatically gets severed from the Hindu family. Conversion in religion as far as Hindu law is…

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