COMMISSIONER OF INCOME-TAX, GUJARAT versus KESHAVLAL LALLUBHAI PATEL

Citation: [1965] 2 S.C.R. 100 · Decided: 09-11-1964 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

COMMISSIONER OF INCOME-TAX, GUJARAT 
A 
v. 
KESHAVLAL LALLUBHAI PATEL 
November 9, 1964 
[K. SUBBA RAo, J. C. SHAH AND s. M. Sumi. JJ.] 
Income Tax Act, 1922 (11of1922)-Self-acquired property thrown int.? 
11.UF. Hotchpotch-Thereafter partition effected amongst member•· 
H.U.F.-Whether property transferred to wife and minor son amounted 
toindirect transfers under· s. 16(3) (a) (iiiQ and (iv). 
Until the assessment year 1952-53, the assessee was assessed as an iruh· 
vidual. 
On April 18, 1951, he swore an affidavit to the effect that he 
was throwing all his self-acquired properties into the common hotchpotch 
of the Hindu undivided family consi•ting of hi1Melf arul hill two soru;. t 
one a major and the other a minor. On June 12, 1951, an oral partition""' 
effected between the several members of thia undivided family, and as :i 
result some of the properties were transferred to the uses.sce'5 wife and his 
1ninor son. 
c 
For the assessment year 1952-53, the a'iSes.'iee claimed that assessment 
.,hould be made taking into account the conversion of his .cit-acquired 
property into joint family property and the subsequent partition. 
The 
Appellate Tribunal confirmed the orders o[ the Income-tax Officer and the 
Assistant Appellate Commissioner disallowing the claim of the a"<SesSee on 
the ground that throwing into the hotchpotch one's self-acquired property 
and a subsequent partition among the members of the Hindu undivided 
family was an indirect transfer of property within the meaning of s. 16( J) 
D 
of the Income-tax Act, 1922. However, upon a reference made to it. the 
High Court \Vas of the view that the above transactions did. not amoW1t 
lo a direct or indirect lransfer within the meaning of s. 16(3)(a)(iii) and 
(i\') of the Act. 
HELD: The two condilions that must be satisfied before s. Jn(:I)(>) 
(iii) or (iv) can apply are-
(i) Assets must be transferred by the husband to the '<\'ifc or the min•lr 
child; and 
(ii) They m,..;I he transferred directly or indirectly. 
Only the word 'transfer' occurs in s. 16(3)(a)(iii) and (iv) and a 
comparison with the language of s. 16(3) (c) shows that here it ha.• been 
t1scd in the strict sense and not in the sense of 'including: every means hy 
F 
which property may be passed from one to another'. [103 D-0] 
G 
Plti/ip John Plasket Thomas v. Cl.T. Calcutta, [1964] 2 S.C.R. 430 
referred to. 
Although the expression 'directly or indirectly' is intended to take in 
indirect U'llosfers, there must still be a transfer and the word 'indirectly' 
does not destroy the significance of the word 'transfer'. 
Even 
if the 
•ct of throwing self-acquired property into the hotchpotch is regarded u 
a traOJfcr, the partition of Joint Hindu family property is not a transfer 
H 
in the strict sense and the provisions of s. 16(3) (a) (iii) and (iv) are th=-
fore not attracted. [104 A, G; 105 C-D) 
C.l.T. v. C. M. Kothari, [l964] 2 S.C.R. 531. distinlluished. 
' 
A 
B 
c 
D 
C. I. T. V. K. L. PATEL ($ikri, J.) 
101 
Gutta Radhakristnayya v. Gutta Sarasamma, l.L.R. ( 1951) Mad. 607, 
M. K. Streman v. CJ.T. Madras, 41 I.T.R. 297 and Jagan Nath \'. State 
of Punjab, (1962) 64 P.L.R. 22, approved. 
Patti Executors v. Commissioners of Inland Revenue, 32 T.C. 211, 
referred to. 
ClvJL APPELLATE JURISDICTION ; Civil Appeal No. 1022 o[ 
1963. 
Appeal from the judgment and order dated April 28, 1961 
of the Gujarat High Coun in Income-tax Reference No. 16 of 
1960. 
K. N. Rajagopa/a Sastri and R. N. Sachthey, for the appellant. 
A. V. Viswanatha Sastri, J. P. Pandit, T. A. Ramachandran, 
J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the 
respondent. 
The Judgment of the Coun was delivered by 
Sikri, J. This is an appeal on certificate granted by the Gujarat 
High Coun under s. 66A(2) of the Indian Income Tax Act, 1922, 
hereinafter referred to as the Act, and involves the interpretation 
of s. 16(3)(a)(iii) ands. 16(3)(a)(iv) of the Act. 
The facl~ 
are not in dispute and it is not necessary to record the findings of 
E 
the Income Tax Officer and the Assistant Appellate Commissioner. 
It is sufficient to extract the relevant facts from the order of the 
Appellate Tribunal. 
The respondent. Keshavlal Lallubhai Patel, hereinafter referred 
to as the assessee. was assessed till the assessment year 1952-53 
11 
(Accounting year ending March 31, 1952) as an individual, 
On April 18. 1951. he swore an affidavit before the Deputy Nazir, 
District Coun, Ahmedabad, throwing all his self-a

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