Law:

Section:

Section 64 of the Income-tax Act, 1961 [Corresponding to section 16(3) of the Indian Income-tax Act, 1922] - Transfer of assets - For benefit of spouse etc. - Assessment year 1960-61 - Assessee, by a deed of partition, divided his self-acquired properties between himself and his adopted minor son - There was no evidence from which one could draw inference that separate property was impressed with character of joint family property - There was no postponement of vesting of property in minor - Whether on facts petition deed could only operate, not as partitioning joint family property, but as dividing self acquired property, which, in effect would amount to gift of properties allotted to share of adopted son - Held, yes -Whether, therefore, income from properties allotted to minor could be included in total income of assessee under section 16(3)(a)(iv) of 1922 Act - Held, yes Section 4 of the Wealth-tax Act, 1957 - Deemed wealth - Debt owed - Assessment year 1960-61 - Whether on facts stated under heading 'Transfer of assets -For benefit of spouse etc.' under Income-tax Act, value of properties in question were includible in net wealth of assessee under section 4(1)(a)(ii) - Held, yes Section 2(m) of Gift-tax Act, 1958 - Gift - Whether on facts stated under head "Transfer of assets - For benefit of spouse etc." under Income-tax Act, allotment of properties in question by assessee to adopted son under his deed constitutes 'gift' within meaning of Act - Held, yes FACTS The assessee owned certain immovable properties which were admittedly his self-acquired properties. As he had no male issue, he took one 'N', aged 14 years, who was his brother's son, in adoption in 1957. On 15-11-1958, he purported to divide the properties between himself and his adopted son by a deed of partition. In the course of the wealth-tax proceedings for the years 1959-60 and 1960-61, and the income-tax proceedings for the assessment year 1960-61, the ITO (who was also WTO) refused to accept the case of partition as effected by the deed dated 15-11-1958, and proposed to assessee the income of the properties as if he was the sole owner. The ITO, treating the deed as a deed of gift, assessed…

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