1. Two questions for which rule was issued in this matter are (1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in allowing the appeal of the Gift-tax Act in view of the complicated nature of the question involved in the case and (2) Whether the order of the Tribunal allowing the appeal of the Gift-tax Officer on the narrow ground was justified and valid in law
2. The principal question that arose for consideration before the Tribunal was whether a Hindu female could throw into the common hotch-pot of the Hindu Undivided Family of which she was a member of 11,100 shares of Kirloskar Oil Engines Ltd. which were her self acquired property. The case of the petitioner was that on 26-2-1971 she blended the said shares in the said HUF by throwing the same in the common hotchpot. Admittedly later on the shares were transferred to the name of the petitioner's husband as the Karta of HUF. In respect of this transaction the Gift-tax Officer levied the gift tax after rejecting the contention of the petitioner that the value of the gift was nil as throwing of shares by her in the common hotch-pot of the said HUF did not amount to a gift. The matter was carried in appeal to the Appellate Assistant Commissioner where the self-same contention was urged that there was no transfer involved when a Hindu female impressed her self acquired property with the character of HUF and in support a judgment of the Delhi High Court in : 85ITR129(Delhi) was relied upon. The A.A.C. dismissed the appeal relying upon the decision in : 82ITR7(Delhi) without considering the judgment in : 85ITR129(Delhi) . Thereafter at the instance of the petitioner her Chartered Accountant wrote a letter dated 18-12-1972 pointing out to the A.A.C. that he had not considered all the arguments and particularly the decision : 85ITR129(Delhi) . The A.A.C. rectified his previous order holding that the gift tax was not payable and by his order dated 25-1-1973 allowed the application of the petitioner and consequently allowed the appeal by correcting his earlier order dated 30-11-1972. Aggrieved by the order of the A.A.C. dated 25-1-1973 the Gift-tax Officer filed an appeal before the Tribunal and it was principally contended that the correct view in law was that a female could not impress her self acquired property with the character of HUF by blending the same into HUF throwing into the common hotch-pot and that the decision in : 82ITR7(Delhi) was applicable and the A.A.C. had erred in passing the order under section 34 without jurisdiction. The Tribunal allowed the appeal of the Gift Tax Officer and rejected all the contentions that were urged by the petitioner with regard to the A.A.C.'s order rectifying his earlier order. The petitioner then applied for reference being made under section 26(1) of the Gift Tax Act requiring the Tribunal to raise and refer the two questions set out at the commencement of this judgment to the High Court. The Tribunal by its order dated 11-6-1975 rejected that application and the petitioner has come up in a petition to this Court and the rule as indicated above earlier has been issued.
3. We are clearly of the view that the correct position in law is as has been set out in : 82ITR7(Delhi) . This Court in Gift Tax Application No. 3 of 1971, Commissioner of Gift-tax, Bombay City I, Bombay vs. Mrs. Kusumben D. Mehadevia has also taken the view that a Hindu female could not throw her self acquired property into the common stock and no provision of Hindu law had been pointed out to the Court by Counsel for the Revenue under which such a thing could be done by a Hindu female. On merits of the question, therefore, it seems to us clear that the A.A.C.'s earlier order dated 30-11-1972 was proper order whereby he confirmed the Gift Tax Officer's view. It is also clear that in view of the clear position in law there was no error apparent on the face of the record which the A.A.C. could rectify under section 34 of the Act. It was sought to be urged by Mr. Patil before us that at any rate there was a decision of the Delhi High Court under the provisions of the Gift Tax Act reported in : 85ITR129(Delhi) which had taken a contrary view which had commended itself to the A.A.C. when it passed order dated 25-1-1973. In the first place, it was a decision of the Delhi High Court and the Gift Tax Officer as well as the A.A.C. and in fact the Tribunal would ordinarily be bound by the statement of law as has been propounded by this Court, which was done in Gift Tax Application No. 3 of 1971. Secondly, in any case the question being a ticklish one on which two divergent views were possible, it cannot be said that there was any error apparent on the face of record which the A.A.C. could rectify.
4. In the result, the rule is discharged with costs.