Law:

Section:

Section 29, read with section 2(1)(xxiv) of the Gift-tax Act, 1958 and article 226 of the Constitution - Gift-tax by whom payable - 'S' gifted certain properties to his daughters - He also made a declaration treating his self-acquired properties as property of HUF consisting of himself and his four sons and later effected a partition of said properties - In gift-tax return he showed only properties gifted to his daughters - GTO held that properties gifted to four sons were also liable to payment of gift-tax - On writ, not only gift-tax assessment was challenged on ground of having been made on donees, but also challenged Parliament's legislative competence to enact law providing for taxation of gifts of lands and buildings - Whether Act does not entrench upon exclusive legislative power of State legislature as indicated in item 49 of State List, and as manifest object of Act and its pith and substance was not to tax lands and buildings as such but to impose tax on gifts inter vivos, scope of gift-tax was referable to article 248, read with item 97 - Held, yes - Whether, therefore, petitioners' objection as to legislative competence of Parliament for enacting Act was not correct and must be rejected - Held, yes - Whether by means of his declaration, deceased 'S' was diminishing his rights to property and increasing right to property and increasing right of others within meaning of section 2(xxiv)(d) and, therefore, would fall within meaning of gift as defined in section 2(xii) and section 4(d) - Held, yes - Whether while section 123 of Transfer of Property Act required that for purpose of making a gift of immovable property, transfer must be effected by a registered instrument, there was no such limitation or condition imposed upon gift as defined in section 2(xii) or 2(xxiv) - Held, yes - Whether even under Hindu law all that was required was that there should be a clear intention on part of a member of joint family to waive his separate rights in properties and to impress them with character of joint family properties - Held, yes - Whether since it was on information supplied by one of petitioners and after discussion with their chartered accountant,…

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