Law:

Section:

Section 2(xii) of the Gift-tax Act, 1958 - Gift - Validity of - Assessee, a mother of two sons 'M' and 'G', inherited rights which her husband had before death in HUF properties by virtue of section 3(2) of the Hindu Women's Rights to Property Act, 1937 - By an agreement made on 21-10-1957 between HUF coparceners and assessee, immovable properties of joint family were divided between 'M' and 'G' in equal proportion, assessee having no claim in said properties nor any share in division of businesses run by 'M' and 'G' from out of joint family assets - GTO held that since assessee had not taken her one-third share in assets of joint family upon partition of properties, it amounted to gift in favour of her two sons, liable to gift-tax - Whether in view of fact that assessee's interest in joint family properties devolving on her under sections 3(2) and 3(3) of the Hindu Women's Rights to Property Act, had not been defined either on her husband's death in 1920 or on date of coming into force of the Hindu Succession Act, 1956, she could not be held to be absolute owner of a defined or determinate share - Held, yes - Whether, as assessee's share in joint family properties was indeterminate, by giving up her share of interest therein, she had not transferred any property to her sons within meaning of section 2(xxiv) and had thus not made a gift as defined in section 2(xii) - Held, yes Section 4 of the Gift-tax Act, 1958 - Deemed gift - Whether in view of facts, stated under heading 'Gift - Validity of assessee's act in entering into said agreement amounted to a deemed gift within meaning of section 4(c) - Held, no Facts The husband of the assessee had died in 1951. She was widowed mother of 'M' and 'G', coparceners of HUF, which owned movable and immovable properties, and after the death of her husband, she inherited the same rights in the HUF properties as her husband had, by virtue of section 3(2) of the Hindu Women's Rights to Property Act, 1937. On 21-10-1957, an agreement was made between 'M' and 'G' the assessee and another, in respect of the assets of the family. The agreement provided, inter alia, that the immovable properties belonging to the family would…

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