COMMISSIONER OF GIFT TAX, MADRAS versus N. S. GETTY CHETTIAR

Citation: [1972] 1 S.C.R. 736 · Decided: 16-09-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Judgment (excerpt)

736 
COMMISSIONER OF GIFT TAX, MADRAS 
v. 
N. S. GETTY CHETTIAR 
September 16, 1971 
[K. S. HEGDE AND A. N. GROVER, JJ.] 
A 
Gift Tax Act, 1958-Section 2(xii) and 2(xxiv)-Coparcener taking 
B 
lesser share and allotting greater 
share to other 
members-If makes 
"gift"-Partition, if "transfer of property". 
In a partition of the properties of a joint Hindu Undivided Family a 
coparcener took as his share less than what he was entitled to and allotted 
greater share to the other members of the coparoenery. On the question 
whether the coparoener could be held to have made a "gift" of a portion 
of his share of the property to the other members and w"' liable to tax 
C 
under the Gift Tax Act, 1958. 
HELD : (i) A coparcener in a Hindu Undivided Family has no defi-
nite share in the family property. 
His share gets determined only when 
there is a division of status or a division by metes and bounds. 
It is not 
necessary that in every case of par:tition in a Hindu Undivided Family 
there should first be a division in status and thereafter a division by metes 
and bounds. In the present case there is no material to show that there 
D 
was any division of status before the properties were actually divided. 
Therefo·re, it is not necessary to consider what would be the po_sition in 
law if there was just a division of status and the same was followed by a 
division by mete• and bounds. [738 H-739E] 
(ii) The partition of the joint Hindu Family property is not a transfer 
as generally understood in law. 
[741-G] 
Commissioner of Income-tax, Gujarat v. Keshav/al 
Lallubhai Patel, 
E 
55 I.T.R. 637, followed. 
(iii) A partition is not a "dispdsition" "conveyance" •'assignment" 
"settlement" 
"delivery" "payment" 
"or other alienation of property" 
within the meaning of those words s. 2 ( xxiv) of the Act. These words 
are used as some of the modes oCtransfer of property and have to oe 
understood in the setting in which those terms are used and the purpose 
they are intended to serve. [742-G] 
F 
It cannot be considered a "transaction 
entered 
into by any person 
with intent thereby to diminish directly or indirectly the value of his own 
property and to increase the value of the property of any other person" 
within the meaning of cl. (d) of s. 2(xxiv), because, a member of a Hindu 
Undivided Family who has no definite share in the family property before 
division cannot be said to diminish directly or indirectly the value of his 
own property and to increase the value of the property of another person. 
Further, the transaction referred to in cl. (d) of s. 2(xxiv) takes its colour 
G 
..from the main clause i.e., it must be transfer o'f property in some way. 
[742 H-743 CJ 
CML APPELLATE JURISDICTION: Civil Appeals Nos. 128 of 
1968 and 1341 of 1971. 
Appeals by certificate/ special leave from the judgment and 
order dated December 10, 1965 of the Madras High Court in Tax 
Case No. 65 of 1967 (Reference No. 18 of I 963). 
H 
A 
11 
c 
D 
E 
F 
G 
H 
COMMR. GIFT TAX v. N. s. CHETTIAR (Hegde, J.) 
737 
Jagadish Swarup, Solicitor-General, A. N. Kirpal, R. N. Sach-
they and B. D. Shar,na, for the appellant (in both the appeals). 
Uttama Redd.Y and D. N. Gupta, for the respondent (in both 
the appeals). 
The Judgment of the Court was delivered by 
Hegde, J, 
Both these appeals by the Commissioner of Gift 
Tax arise from the same judgment. The former one is by certi-
ficate and !he latter by special leave. 
Civil Appeal No. 1341 
of 1971 came to be filed because the certificate given 
biy 
the 
High Court not being supported by any reason, the appeal brought 
on the strength Qf that certificate (Civil Appeal No. 128 
of 
1969) became unsustainable. That is why instead of one appeal, 
there are two appeals before us in -respect of the same decision. 
The decision appealed against was rendered by the High 
Court of Madras in its advisory jurisdiction, in a reference under 
s. 26( 1) of the Gift Tax Act, 1958 (to be hereinafter referred 
to as the Act). 
The Income Tax Appellate Tribunal, Madras 
Bench referred the question 
"Whether there was gift by N. S. Getti Chettiar of 
Rs. 2,46,3 77 on which he is liable to pay gift tax" 
to the High Court seeking its opinion. The High Court answered 
that question in the negative. 
The Commissioner of Gift Tax 
not being satisfied with that decision h'ls brought these appeals. 
The facts of the case are not many though the question of 
law arising for decision is by no means easy .. The re

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