JAGANMOHAN REDDY C.J. - This court had directed the Income-tax Appellate Tribunal, Hyderabad, to state a case on the following question, viz. : Whether, on the facts and in the circumstances of the case, the deed dated December 23, 1957, executed by the assessee in favour of her son, Sriramulu, constituted a transaction of gift under section 2(xii) of the Gift-tax Act liable for assessment ?'
The assessee is the wife of one Valluru Pullayya, Mandapeta. They had three sons by name Valluru Sriramulu, Valluru Narasimharao and Valluru Sathiraju. The father and the three sons constituted the joint family. On April 9, 1953, the father partitioned the properties between himself and his three sons and each of whom got into possession of their respective shares. On August 30, 1954, Valluru Sriramulu, the eldest of the three sons executed a deed of gift whereby he transferred the entire properties obtained on partition to his mother, the assessee. It may be stated and it is not disputed that at the time when the gift deed was made, Valluru Sriramulu had a daughter and his wife was enceinte. A month after this gift deed a son was on to him. Thereafter, on November 17, 1954, it is stated that the mother (assessee) executed an agreement to reconvey the properties in favour of Sriramulu. Pursuant to the agreement dated November 17, 1954, the assessee executed a gift deed whereby she reconveyed all the properties to her son, Sriramulu, which were gifted to her by him through the gift deed dated August 30, 1954. Subsequently, the mother, (i.e., the assessee) as the guardian of the infant son, filed a suit in 1959 against Sriramulu for partition and separate possession of the minor sons share. This suit was hotly contested because the defendant, Sriramulu, denied many of the allegations made in the plaint, and it is said that the suit resulted in a decree.
The Gift-tax Officer assessed the assessee to gift-tax on this reconveyance. The assessee pleaded that this conveyance did not come within the purview of the Gift-tax Act as it did not have any of the essential ingredients of a gift, that the first conveyance itself was a sort of sham and faked affair that this device was resorted to because her son started disputing the properties by leading an immoral life, and in order to prevent his ways of vice and wasteful habits, it was considered necessary to transfer the properties to his mother, and that as a consequence, the gift deed dated August 30, 1954, was executed. It was also contended that at the time when Sriramulu conveyed the property by way of gift to his mother in 1954, he had only a daughter and, since the properties gifted belonged to the Hindu joint family, Sriramulu was not competent to gift away the whole of those properties, and at the most the gift could be valid only to the extent of his share. The Gift-tax Officer rejected this claim of the assessee and held that the gift was valid and consequently assessed her to tax. The Appellate Assistant Commissioner also negatived the contentions of the assessee, and, having looked into the content of the two gift deeds, he found that there was nothing therein to support the version of the assessee.
Before the Tribunal, the assessee filed the plaint and the written statement in O. S. No. 25/59 on the file of the subordinate judge, Rajahmundry. The learned advocate appearing for the assessee now states that he had filed the cast receipts before the Tribunal to show that, not withstanding the gift deed of 1954, the possession was still with Srirmulu, that he had not parted with it, and that the gift was a only nominal one. He also says that he had informed the Tribunal that the agreement dated November 17, 1954, was not in his power and control and until it was filed in the court, he could not obtain copies thereof. In spite of this, he says that the Tribunal did not consider these aspects of the matter.
Mr. Kondaiah appearing for the department has quite rightly contended that if the cist receipts were file and no notice was taken, the assessee could have specifically asked for this matter to be mentioned in the statement of the case, and if that was not acceded to, the assessee could have asked this court for a specific question in this respect. Neither of these she did. Consequently, we are precluded from going into the question whether in fact the assessee had filed the cist receipts before the Tribunal. On the last occasion when the case was partly heard, we had asked Mr. Kondaiah to send for the records of the Tribunal which, however, disclose that copies of the plaint and the written statement were filed by the assessee. The advocate for the assessee frankly admits that he had not asked for an adjournment to produce the agreement; as such, we cannot say that the Tribunal has failed to give him an opportunity to file the relevant evidence. Notwithstanding these defects, we think that the contention of the learned advocate that the gift is invalid must be sustained. Apart from the question that the plaint alleges that the gift was only nominal one, in the circumstances as set out therein, namely, that Sriramulu was given to ways of vice and wasteful habits and was dissipating the property as a consequence of which the elders persuaded him to transfer the property nominally in the name of his mother, which allegation though denied to the extend of his leading a life of vice and wasteful habits, admitted that the transfer itself under the Hindu law would be void and invalid. On the admitted facts, on the date when the gift was made, the property was a joint family property was a joint family property of Sriramulu consisting of himself and his daughter, and the son being in the womb at the time, any alienations made could be challenged by him. It is elementary that a son would inherit a right in the joint family property from the date he is conceived. Though a Bench of this court in Commissioner of Wealth-tax v. Narendranath held that the property of a sole coparceners of a Hindu joint family cannot be treated as a joint family property in the absence of a son and no joint family can deemed to be constituted with a daughter, their lordships of the Supreme Court in a recent case, viz., Gowli Buddanna v. Commissioner of Income-tax have held that the property of the joint family did not cease to belong to the family merely because the family was represented after As death by a single coparcencer, B, who possessed rights which an owner of property might possess, and the income received therefrom was taxable as the income of the Hindu undivided family. There need not be more than one male member to form a Hindu undivided family as a taxable entity under the Income-tax Act. The expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the personal law of the Hindus. Under the Hindu system of law a joint family may consist of a single male member and widows of deceased male members. It was further observed that under section 3 of the Income-tax Act not a Hindu coparcenary but a Hindu undivided family is one of the assessable entities. A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters. A Hindu coparcenary is much narrower body than the joint family : it includes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grandsons, and great-grandsons of the holder of the joint property for the time being.
As we have said, at the time when the gift was made, the joint family of Sriramulu consisted of himself, his wife and daughter apart from the son in the womb, who had a right to challenge the gift; as such there was a joint family in existence to preclude Sriramulu from gifting away the properties. That a gift by a Hindu farther or a manager or a coparcencer of an undivided joint family property is void is supported by a series of decision ranging over a long period beginning from Baba v. Thimma to the latest decision of the Supreme Court, Guramma v. Mallappa. There is a consensus of opinion of the courts in this country that expect for reasonable gifts made to members of the family, all other gifts, whether to strangers or of the entire properties to relations, are void and uncoiled. A full Bench of the Madras High Court in Baba v. Thimma categorically held that a Hindu father, if unsupported, has no power, except for purposes warranted by special texts, to make a gift to a stranger of ancestral estate, movable or immovable.
In Peramanayakan v. Sivaraman another Full Bench of the same High Court consisting of five judges reviewed the entire case law and came to a similar conclusion. This decision was referred to with approval by their Lordships of the Supreme Court in Guramma v. Mallappa. Subba Rao J. (as he then was), delivering the judgment of the court, observed at pages 516 and 517 as follows :
'But what we are concerned with in this case is the power of a manager to make gift to an outsider of a joint family property. The scope of the limitations on that power has been fairly well-settled by the decisions interpreting the relevant texts of Hindu law. The decisions of Hindu law sanctioned gifts to strangers by a manager of a joint Hindu family of a small extent of property for pious purposes. But no authority went so far, and none has been placed before us, to sustain such a gift to a stranger, however mush the donor was beholden to him on the ground that it was made out of charity. It must be remembered that the manager has no absolute power of disposal over joint Hindu family property. The Hindu law permits him to so only within strict limits. We cannot extend the scope of the power on the basis of the wide interpretation given to the words pious purposes in Hindu law, in a deferent context. In the circumstances, we hold that a gift to a stranger of a joint family property by the manager of a family is void.'
In the instant case, the gift was made by the divided son, who is the head of his joint family consisting of himself, his daughter and wife, to his mother, who, to all intents and purposes, was not a member of his joint family and the gift was of the entire share which was received on partition. In the circumstances, the gift is void. We also hold that the transaction admittedly was a nominal one. If so, it need not be set aside. In any case, the gift deed itself being void, there was no need nor necessity for a second gift deed, which is now sought to be taxed, and consequently, the assessee is not liable for gift-tax on this latter transaction.
Our answer to the reference is in the negative and in favour of the assessee with costs. Advocates fee Rs. 250.
Question answered in the negative.