Law:

Section:

Section 2(xii) of the Gift-tax Act,, 1958 - Gift - Gift was made by divided son to his mother (assessee) of his entire share received on partition - At time of making gift, dividend son was head of his joint family which consisted of daughter, wife and a son in womb - Later, by another deed of gift, assessee reconveyed entire properties to divided son - Whether, on facts, gift made by divided son to assessee was void - Held, yes - Whether gift itself being void, there was no need nor necessity for a second gift deed which was sought to be taxed - Held, yes - Whether, consequently, assessee was not liable to tax on reconveyance - Held, yes FACTS The father and three sons constituted a joint family. The joint family property was partitioned and the eldest son made a gift of the entire share to the assessee-mother. The assessee by another deed of gift reconveyed the properties in favour of the eldest son. The GTO assessed the assessee to tax on reconveyance. On appeal, the AAC confirmed the order of the GTO. On second appeal, the Tribunal confirmed the order of the AAC. On reference: HELD There need not be more than one male member to form a HUF as a taxable entity under the Income-tax Act. The expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the personal law of the Hindus. Under the Hindu system of law a joint family may consist of a single male member and widows of deceased male members, and the Income-tax Act does not indicate that a HUF as an assessable entity must consist of at least two male members. Under section 3 of the Income-tax Act, 1922, not a Hindu coparcenary but a HUF is one of the assessable entities. A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters. A Hindu coparcenary is a much narrower body than the joint family; it includes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grandsons, and great-grandsons of the holder of the joint property for the time being. In the instant case, at the time when the gift was made, the…

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