Law:

Section:

Section 64(iv) [as it stood before 1-4-1976] of the income-tax act, 1961-Transfer of assets for benefit of spouse or minor child-Assessee, a French national residing in pondicherry, along with her husband transferred properties, inter alia, to their minor daughter by document, dated 21-9-1963 under french civil code-Whether tribunal right in holding that impugned transaction was transfer without consideration and resultant income from properties so transferred includible in assessee's total income under section 64-Held, on facts, yes Section 4(1)(a)(ii ) of the wealth-tax act, 1957-Deemed wealth-Transfer of assets to minor child without adequate consideration-whether tribunal right in holding that impugned transaction fall under section 4(1)(a)(ii ) and resultant value of properties so transferred includible in computation of total wealth as deemed wealth-Held, on facts, yes Facts The assessee was a French national residing in Pondicherry. By a document, dated 21-9-1963, she and her husband transferred the properties to their children, including a minor daughter N. Pot the assessment years 1964-65 to 1967-68, the income arising from the properties transferred to the minor daughter was included in the total income of the assessee under section 64(iv). On appeal, the assessee contended (i) that the nationals of Pondicherry were to be governed either by the personal law or by the French Civil Code and, though the assessee was a Muslim lady, she could adopt the French Civil Code and be governed by it; and (ii) that the said document, dated 21-9-1963 (using the word "donation" and stating that it is being made under section 1075 of the French Civil Code) was not a gift by a transfer of property due to the descendants and she and her husband had disposed of the properties by accelerating the partition so that there was actually no gift and no transfer of assets within the ambit of section 64(iv). The AAC upheld the inclusion, observing (i) that the assessee, without renouncing her personal law, could not claim to be governed by the French Civil Code; and (ii) that the minor daughter was only a donee and she had no pre-existing right in the property at the time of…

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