Law:

Section:

Section 2(xxiv) of the Gift-tax Act, 1958 - Transfer of Property - RK, the paternal grandfather of assessee, by a will bequeathed his property to his sons - On RK's death sons ignored said will and effected partition by a partition deed - VK, one of RK's sons, executed a will in respect of his share bequeathing his property to his wife and daughter P, the assessee - On VK's death, there was a dispute regarding bequest, which ended with Supreme Court's decision that VK was entitled to bequeath said property to his wife and P - Disputes then arose regarding property between assessee and her children - To settle the dispute, a family arrangement regarding above-mentioned property was made - Tribunal found that family arrangement was bona fide and made by the intervention of panchayatdars - Whether there was transfer of property within meaning of section 2(xxiv) so as to make assessee liable under sections 4(1)(a) and 4(2) - Held, on facts, no Section 64(iii) [as it stood prior to 1-1-1971] of the Income-tax Act, 1961 - Transfer of assets - For benefit of spouse or minor child - Whether on facts mentioned under heading 'Transfer of property' surrender of portion of properties bequeathed to assessee by her father in favour of her minor son did not amount to a transfer of assets within meaning of section 64(iii) and, therefore, inclusion of income from surrendered properties was improper and should be deleted - Held, on facts, yes FACTS One RK executed a will of his property by which he bequeathed his property to his sons. After the death of RK, the sons experiencing some difficulty in partitioning the property according to the will, decided to ignore the will and effected a partition by a duly drawn up partition deed. As a result of this partition VK, one of the sons of the deceased, received some property in respect of which he executed a will on 11-3-1938 bequeathing his property to his wife and daughter P, the assessee. VK died on 31-3-1955 leaving behind his widow and daughter. There were some disputes raised by the brothers of VK with regard to the property bequeathed by him by the will. They claimed that VK had no right to make a will in respect of the…

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