K.S. Puttaswamy, J.
1. In this reference made under section 26(1) of the Gift-tax Act, 1958 (Central Act 18 Of 1958) ('the Act'), the Income-tax Appellate Tribunal, Bangalore Bench, Bangalore ('Tribunal'), at the instance of the Revenue has referred the following question of law for the opinion of this court :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in allowing the relief under section 5(1)(viii) in a case where the karta of a Hindu undivided family has given a gift to his wife from out of Hindu undivided family funds ?'
2. In order to appreciate this question, it is necessary to notice the facts that are not also in dispute in the first instance.
3. As the karta or the manager of a joint Hindu family (HUF) consisting of himself, his wife and children, the assessee by a deed of gift dated March 14, 1973 (annexure-C), gifted certain properties of the Hindu undivided family detailed in the schedule to that deed of the value of Rs. 60,000 to his wife, Smt. B. S. Narasamma.
4. For the assessment year 1973-74 relevant to the previous year ending on March 31, 1973, the assessee filed his return under the Act before XIVth Gift-tax Officer, Circle-I, Bangalore, claiming exemption under section 5 of the Act to the extent of a sum of Rs. 50,000 gifted to his wife with which claim only we are concerned in this case. On February 10, 1975, the Gift-tax Officer completed the assessment allowing the said exemption claimed by the assessee without critically examining the same (annexure-A).
5. With the aforesaid assessment made by the Gift tax Officer, the assessee was not aggrieved. But, the Commissioner of Gift-tax exercising his suo motu power of revision conferred on him by section 24 of the Act, and after issuing the requisite notice and affording, an opportunity of hearing, by his order dated January 11, 1977 (annexure-B), revised the same and directed the Gift-tax Officer to withdraw the exemption granted by him to the assessee and bring the same to tax under the Act. Aggrieved by the said order of the Commissioner, the assessee filed an appeal under section 25 of the Act before the Tribunal, which by its order dated June 13, 1978 (annexure-D), allowed the same, set aside the order of the Commissioner and restored the order of the Gift-tax Officer. Hence, this reference at the instance of the revenue.
6. Sri K. Srinivasan, learned senior standing counsel for the Income-tax Department, assisted by Sri H. Raghavendra Rao has appeared for the Revenue-Sri G. Sarangan, learned advocate, has appeared for the assessee. Both sides have relied on a large number of rulings in support of their respective cases. We will refer to them at the appropriate stage.
7. Sri Srinivasan has urged that a gift made by the 'karta' as the 'karta' of the properties belonging to a Hindu undivided family, on the plain language of section 5(1)(viii) of the Act, does not qualify for exemption.
8. Sri Sarangan, in refuting the contention of Sri Srinivasan, has urged that a 'karta' making a gift of the property of a Hindu undivided family was also an individual and such a gift also qualifies for exemption under section 5(1)(viii) of the Act, as held by other High Courts for two decades and that view, even if another view was possible, should be preferred by this court.
9. The Act has been enacted to provide for levy of gift-tax. Section 2 of the Act defines various terms that are generally found in the Act. Section 3 of the Act which is the charging section provides for levy of gift-tax from April 1, 1958, in respect of the gifts, if any, made by a person during the previous year at the rate or rates specified in the Schedule to the Act. Section 4 of the Act declares certain transfers as gifts for purposes of the Act. Section 5 provides for exemptions in respect of certain gifts, one of them being gifts made by one spouse to another spouse subject to the limitation on the value - vide section 5(1)(viii). Before ascertaining the true scope and ambit of this provision with which only we are concerned, it is useful to remember the well-settled concepts of a Hindu undivided family in Hindu Law and some of the rules of construction of statutes at the forefront.
10. A joint Hindu family consists of male members descended lineally from a common male ancestor, together with their mothers, wives or widows and unmarried daughters bound together by the fundamental principle of sapindaship or family relationship which is the essence and distinguishing feature of the institution [vide : Ragunada Deo v. Brozo Kishore, ILR  Mad 69; 3 IA 154 . This body is purely a creature of law and cannot be created by act of parties, save in so far as by adoption or marriage, a stranger may be affiliated as a member thereof. It is also a corporate body [vide Bhagwan Dayal v. Mst. Reoti Devi, : 3SCR440 ]. An undivided family which is the normal condition of Hindu society is ordinarily joint not only in estate but also in food and worship and, therefore, not only the concerns of the joint family, but whatever relates to their commonality and their religious duties and observances are regulated by the members or by the manager to whom they have expressly or by implication delegated the task of regulation [vide Janakiram v. Nagamony : AIR1926Mad273 . The joint family status being the result of birth, possession of joint property is only an adjunct of the joint family and is not necessary for its constitution. Nor is it that all the members possess equal rights or status, even though the property of the family is called joint family property. A Hindu undivided family and a coparcenary are not one and the same. But, for purposes of taxation under the Income-tax Act of 1961 (as also the Act) they are treated as one and the same (vide Part III, Chapter II - Joint Family and Tax Law of Hindu Law by S. V. Gupta, 3rd edition).
11. A Hindu undivided family is managed by a karta or a manager. When a person acts as a karta or a manager of a Hindu undivided family and disposes of the property of the Hindu undivided family, he disposes of the property of the Hindu undivided family representing that Hindu undivided family and not his personal property, which he can and may possess. Except for this, it is not necessary to notice all other incidents and powers of a karta or a manager of a Hindu undivided family. We are not here concerned with the validity of a gift made by a karta of a Hindu undivided family of a property belonging to his Hindu undivided family.
12. In Kapurchand Shrimal v. Tax Recovery Officer : 72ITR623(SC) , the Supreme Court was considering whether a karta or manager of a Hindu undivided family can be arrested and detained in civil prison for recovery of tax due by a Hindu undivided family. In holding that the karta was not a person and cannot be arrested for default committed by a Hindu undivided family, the court, speaking through Shah J. (as his Lordship then was), expressed thus (at pp. 627, 628, 629) :
'Under the I.T. Act, 1961, a HUF is a distinct taxable entity, apart from the individual members who constitute that family......
The manager, by virtue of his status, is competent to represent the HUF, but on that account, he cannot, for the purpose of section 222 of the Act of 1961, be deemed to be the assessee when the assessment is made against the HUF and certificate for recovery is issued against the family......
For the default of the HUF, therefore, in payment of tax, the karta cannot be arrested and detained in prison.'
13. In C. Arunachalam v. CIT : 151ITR172(KAR) , a Full Bench of this court explained the distinction and difference between a Hindu undivided family, its karta and an individual in these words (at p. 180) :
'... At the heart of the question is the difference between an individual becoming a partner in his personal capacity and an individual becoming a partner in his representative capacity.
The legal position of the karta when he becomes a partner in a firm has been explained by Subba Rao J. (as he then was), in CIT v. Bagyalakshmi & Co. : 55ITR660(SC) :
'A partner may be the karta of. a joint Hindu family; he may be a trustee; he may enter into a sub-partnership with others; he may, under an agreement, express or implied, be the representative of a group of persons; he may be a benamidar for another. In all such cases, he occupies a dual position. Qua the partnership, he functions in his personal capacity; qua the third parties, in his representative capacity.'
The karta of a Hindu undivided family unlike other individuals has thus a two-fold capacity. Qua the partnership, he functions in his personal capacity, because the rights of partnership are governed by the Partnership Act, 1932. The relation of partners arises from contract and not from status. The partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The Hindu undivided family may be a person or unit of assessment under the Act, but it cannot become a partner in a firm. Qua the third parties, the karta who becomes a partner retains his representative capacity. He is liable to account for the assets of the family or income received by him for and on behalf of the family. Therefore, the share income accrued to him in the partnership firm can be brought to tax only in the assessment of the HUF and not in his individual status.
This is the essential difference in tax liability between the karta partner and other partners under the Act......'
14. What emerges from these rulings is that a karta and an individual are not one and the same and are separate and distinct entities in law and fact.
15. The very first rule of construction of statutes has been set out by Maxwell on the Interpretation of Statutes (11th edition) thus :
'A statute is the will of the legislature, and the fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded 'according to the intent of them that made it'. If the words of the statute are in themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature.'
16. In interpreting the Act and the material provisions, it is pertinent to remember the oft-quoted classical statement of Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue Commissioners  1 KB 64 , referred to with approval by our Supreme Court in more than one case which reads thus :
'In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.'
17. Another equally well settled principle is that in the guise of interpretation, it is not open to a court to legislate. Bearing the above principles of Hindu law that are relevant and the rules of construction of statutes, we now proceed to ascertain the scope and ambit of section 5(1)(viii) of the Act.
Section 5(1)(viii) of the Act which is material reads thus :
'5. Exemption in respect of certain gifts. - (1) Gift-tax shall not be charged under this Act in respect of gifts made by any person......
(viii) to his or her spouse, subject to a maximum of rupees fifty thousand in value in the aggregate in one or more previous years, the expression 'spouse' in this clause, where there are more wives than one, meaning all the wives together.'
First, section 5(1) provides that gift-tax shall not be charged in respect of gifts made by any person in respect of the properties referred to in the various clauses of that sub-section to the extent of their exemption. Section 5(1) deals with exemption of properties gifted by a person to whom the Act applies. The term 'person' occurring in section 5(1) has been defined in section 2(xviii) of the Act as including a Hindu undivided family or a company or an association or a body of individuals or persons, whether incorporated or not. Whether this wide definition of the term 'person' occurring in section 5(1) of the Act also applies to clause (viii) of sub-section (1) of section 5 or not is the short and interesting question.
Clause (viii) of sub-section (1) of section 5 opens with the terms 'his or her spouse' and on the very plain language of these terms, this clause only governs a gift made by one spouse to another spouse or a husband or a wife to the other as is the case. The term 'his or her spouse' will certainly fall within the meaning of the term 'person'. But, that term, so far as this clause is concerned, has to be confined to 'his or her spouse' only and cannot be extended to all other persons like a Hindu undivided family, etc. We need hardly say that this meaning of the term 'his or other spouse' is consistent with gifts made by one spouse to another spouse and will not also do violence to the language of the clause, the scheme and object of the Act and also will be consistent with the legal incidents of a Hindu undivided family and its karta.
18. The term 'spouse' which is a neutral term means one's wife or husband or both as the context demands (vide Words and Phrases, Permanent Edition, Vol. 39A, at page 537). A marriage can be only between a living man and a living woman and can never be between legal, juristic or artificial persons. That a karta is also an individual can hardly be doubted. But, that does not necessarily mean that there is no difference and distinction between a karta as such and a karta as an individual. Both cannot be treated as one and the same. One is different from the other. When an individual as a karta of a Hindu undivided family makes a gift of a property of the Hindu individual family, he makes a gift as a karta of the Hindu undivided family and the property of the Hindu undivided family and not as an individual of his individual or separate property. One is the very antithesis of the other. We are of the view that these considerations also do not support the construction suggested for the assessee. We are clearly of the view that the construction suggested for the assessee that a karta is as much an individual and a gift made by him as a karta of a Hindu undivided family is also by an individual and falls within the exemption clause of section 5(1)(viii) does violence to the language, scheme and object of the Act, destroys the true legal incidents of a Hindu undivided family and its karta gifting the property of a Hindu undivided family and is unsound and cannot be accepted by us. We have, therefore, no hesitation in holding that section 5(1)(viii) of the Act applies only to a living spouse making a gift to another living spouse as an individual and not as a karta of a Hindu undivided family.
19. In CGT v. R. M. D. M. Ranganathan Chettiar : 133ITR890(Mad) , a Division Bench of the Madras High Court consisting of Sethuraman and Balasubrahmanyan JJ. have expressed a similar view in these words (p. 894) :
'... If the capacity was that of an individual, then the exemption would apply. If the capacity was that of a karta of a joint family, then, on account of the impossibility of a joint family having any spouse, the question of the applicability of section 5(1)(viii) would not arise in the assessment of the joint family...'
20. We are in respectful agreement with these views.
21. A. C. Sampath Iyengar in his treatise 'Three New Taxes', 6th Edition, Vol. 2, edited by Bagchi, at page 221, has expressed a similar view and has doubted the correctness of the rulings to the contrary to which we will now refer. We are of the view that this criticism of the learned author is well founded.
22. In Jana Veerabhadrayya v. CGT  59 ITR 176, a Division Bench of the Andhra Pradesh High Court consisting of Chandra Reddy C.J. and Chahdrasekhara Sastry J., dealing with an identical question almost on similar facts, expressed thus (p. 177) :
'Does the fact that he happened to be the manager of the family make any difference for the consideration of this question In our opinion, none. We are not here concerned with the question whether it is open to the manager of a joint family to make a gift of the joint family property to his wife, nor are we concerned with the question whether it should be allotted to his share.
The controversy relates to the capacity in which he made the gift. It cannot be postulated that he made the gift as the manager of the family, since the words of the document make it abundantly clear that it is in his capacity as the husband that he made the gift. If that were so, there is no reason why this gift should be excluded from the ambit of clause (viii) of section 5(1) of the Act. In our opinion, the Gift-tax Officer was right in granting the exemption. We are firmly of the opinion that this gift cannot be subjected to tax as it comes within the contemplation of clause (viii) of section 5(1) of the Act.'
23. Their Lordships' attention was not drawn to the ruling of the Supreme Curt in Kapurchand Shrimal's case : 72ITR623(SC) . With great respect, we are of the view that this enunciation made by their Lordships runs counter to the principle in Kapurchand Shrimal's case : 72ITR623(SC) . With great respect to their Lordships, we find it difficult to subscribe to these views. What we have said so far holds good to the other ruling of that court in Vadrevu Venkappa Rao v. CGT : 95ITR313(AP) and also other rulings of the High Court of Madras and Punjab and Haryana in M. S. P. Rajah v. CGT : 134ITR1(Mad) and CGT v. Hari Chand , respectively. With respect to their Lordships of the Madras High Court, we find ourselves unable to accept the sweep of the dictum in Rajah's case : 134ITR1(Mad) . In CGT v. K. B. Manickam Gupta : 128ITR598(Mad) ) and Addl. CGT v. Kanshi Ram Doongarshi Dass , the High Courts have not decided the question and they are, therefore, of no assistance to us.
24. Sri Sarangan is right that the view we are taking is different from that of the other High Courts which had held the field for nearly two decades. But, that can hardly be a ground to mutilate the plain language of a section or throw overboard the correct legal principles, in particular of Hindu law, that have stood the test of time. We, therefore, with great deference to the views expressed by the High Court of Andhra Pradesh, Madras and punjab and Haryana regret our inability to subscribe to them.
25. On the foregoing discussion, it follows that our answer to the question referred to us must be in the negative, in favour of the Revenue and against the assessee. We, therefore, answer the question referred to us in the negative, in favour of the Revenue and against the assessee. But, in the circumstances of the case, we direct the parties to bear their own costs.