R.B. Lal, J.
1. The Income-tax Appellate Tribunal, Allahabad Bench, has referred the following questions under Section 256(2) of the I.T. Act, 1961 (briefly ' the Act '), for the opinion of this court:
' 1. Whether, on the facts and in the circumstances of the case, it could be said that the gifts were not accepted by the two ladies, Smt. Bimla Devi and Smt. Shashi Prabha Devi, and they had no possession or control over the amount gifted to them ?
2. Whether the reasonableness or otherwise of the amount of gift when not challenged by any member or members of the family whose interests are affected, could be said to be a void gift ab initio
2. The material facts are these : M/s. Kanhaiya Lal Pyare Lal, assessee, is an HUF with Pyare Lal as its karta. The coparcenary consisted of Pyare Lal and his two sons. Smt. Simla Devi and Smt. Shashi Prabha Devi are the wives of those sons. The accounting period of the assessee relevant for the assessment year 1961-62 was from July 8, 1959 to June 26, 1960. The opening balance during this year was Rs. 1,18,697 ; interest and profit were further credited during this accounting period. On July 8, 1959, transfer entries were made in the account books of the HUF whereby Rs. 42,254-1-3 and Rs. 482-1-0 were transferred in the name of Smt. Bimla Devi and equal amounts were also transferred to the name of Smt. Shashi Prabha Devi.
3. During the assessment years 1961-62 to 1963-66, the assessee asserted that interest was paid to the two ladies on the aforesaid amounts, but the Department did not accept the transfers as gifts and did not allow the payment of interest.
4. For the assessment year 1966-67, the assessee again set up the aforesaid gifts in favour of the two ladies and claimed deduction of the amount of interest paid to the two ladies. For the assessment years 1967-68 to 1969-70 also, the assessee took up the same stand and claimed deduction of interest. The ITO took the view that the transfer entries did not amount to gifts in favour of the two ladies. The amounts remained in deposit in the books of the assessee and the gifts had not been accepted by the donees. He also referred to para. 225 of Mulla's Hindu Law, 13th Edn., and observed that the amounts said to have been gifted to the two daughters-in-law were not reasonable. The assessee appealed to the AAC. The AAC passed a detailed order in the appeal relating to the assessment year 1966-67 and took the view that in reality there were no gifts. He took the same view in the appeals relating to the assessment years 1967-68 to 1969.70.
5. The assessee appealed to the Income-tax Appellate Tribunal and the Tribunal concurred with the reasons and the view of the AAC and dismissed the appeal.
6. The Income-tax Appellate Tribunal refused to make a reference and, therefore, the assessee moved this court and obtained a reference of the aforesaid questions.
7. The AAC took the following circumstances into consideration to come to the conclusion that in reality there were no gifts :
' 1. The gifts were alleged to have been made through book entries on 8-7-59 but up to the assessment year 1965-66, the interest treated as paid by the HUF to the ladies was being disallowed. The assessee never questioned that the interest did not belong to the HUF. For theassessment year 1965-66 the matter went up to the Income-tax Appellate Tribunal and this ground was not pressed before the Tribunal.
2. The assessee never filed any gift-tax return in respect of these gifts.
3. The corroborative evidence and subsequent conduct of the asses-see showed that the assessee never wanted these transfer entries to be treated as gifts by the karta to the two ladies.'
8. The Income-tax Appellate Tribunal decided the four appeals in respect of the assessment years 1966-67 to 1969-70 by a common judgment and placed reliance on the following circumstances to uphold the conclusion of the AAC :
' 1. The entries were made in the books of the assessee.
2. There is no evidence that the gifts were accepted by the ladies.
3. There is no evidence of subsequent conduct to show that the gifts were acted upon.
4. The control and possession over the amounts gifted remained with the family and were not transferred to the two ladies.
5. Up to the assessment year 1965-66, the Department treated the payment of interest to the two ladies as not a permissible deduction and the assessee accepted this position. In the appeal for the year 1965-66, the assessee had not pressed the ground before the Tribunal. In view of this the debits made in the previous years relevant to the assessment years 1963-64 and 1965-66 were not of much help to the assessee.
6. In those years (up to the assessment year 1965-66) the validity of the gifts was not accepted and the assessee did not pursue the matter further.
7. There was no occasion for making these gifts.
8. The amounts alleged to have been gifted represented almost 2/3rds of the capital of the HUF and the gifts were not reasonable.
9. Question No. 1 relates to only two points, namely, whether the gifts were not accepted by the two ladies and whether they had no possession or control over the amounts gifted to them.
10. The gifts were said to have been made on July 8, 1959, by making transfer entries in the books of the HUF. The amounts remained in the possession of the HUF, there is no document to indicate that the gifts were brought to the notice of the two ladies and that they had signified their acceptance of the gifts. Before us reliance has been placed on two entries made in the previous years relevant to the assessment years 1963-64 and 1965-66 to show that the gifts were acted upon and the donees had operated the accounts in which the gifted amounts stood to their credit. The first entry is of debit of Rs. 2,500 in the account of each of the twoladies on June,16, 1962, for purchase of a car. These entries was made in the previous year relevant to the assessment year 1963-64. The other entry is of a debit of Rs. 2,600 in the account of each of the two ladies for purchase of plot No. 25/1, made in the previous year relevant to the assessment year 1965-66. The learned counsel has referred to the decision in Gopal Raj Swamp v. CWT : 77ITR912(All) , in support of the contention that the two entries were sufficient to lead to the conclusion that the gifts were acted upon. The learned counsel has also referred to the decision in CIT v. Brij Lal Lohia : 84ITR273(SC) and has urged that the findings in proceedings for earlier assessment years could not operate as res judicata. Fresh 6ndings different from earlier findings could be recorded by the Tribunal on the basis of the material before it.
11. We have carefully gone through the case of Gopal Raj Swarup : 77ITR912(All) and, in our opinion, it is of no help for deciding the questions which are before us. The answer to the questions whether the gifts were accepted by the donees and whether the possession or control over the gifted amounts were those of the donees which arises for our consideration, would depend on the peculiar facts and circumstances of the case before us. The facts and circumstances of no two cases are likely to be similar and, therefore, there can be no precedential guidance on questions of fact. The facts and circumstances in the case of Gopal Raj Swarup and all other cases discussed in that case were entirely different and, therefore, they are of no help for our present purpose.
12. In Brij Lal Lohia's case : 84ITR273(SC) , the Supreme Court laid down that the decision of the Tribunal reached in earlier proceedings did not operate as res judicata and the Tribunal could, on the strength of the additional material placed before it, take a different view on the question of gifts. In earlier proceedings, the Tribunal had, on a consideration of the facts and circumstances which were placed before it, taken the view that the two gifts alleged by the assessee were not genuine. At the time of assessment proceedings for a subsequent assessment year, the assessee placed further considerable material in support of his contention that the two gifts were genuine. The Tribunal, on a consideration of the entire material, held that the two gifts were genuine. The Supreme Court held that the finding was one of fact and not perverse and could not be interfered with. The principle of res judicata did not operate. In the instant case, the Tribunal did not decline to accept the gifts in question on the grounds that there were findings to that effect in the proceedings for earlier assessment years and they operated as res judicata. The Tribunal had reconsidered the entire material placed before it and then come to the conclusion that in reality there were no gifts. The result of the earlier proceedings was referred to to emphasise only this much thatin those years the assessee had not challenged the finding of the ITO and in one year, namely, the assessment year 1965-66, had not pressed the point before the Tribunal. Thus, the own conduct of the assessee for the earlier assessment years was emphasised. In the proceedings for the assessment years 1966-67 to 1969-70, the assessee had not placed any additional material in support of his contention that the two amounts were gifted to the two ladies. It cannot, therefore, be said that the Tribunal had decided the question of the genuineness or otherwise of the two gifts on the ground of res judicata and not on the basis of the material on the record. Hence, this decision too has no application to the facts of the present case and cannot help the assessee.
13. Now, we turn to the two debit entries of Rs. 2,500 and Rs. 2,600 which are the sheet-anchor of the case of the assessee. The entries in the account books of the HUF were nothing but the own acts of the assessee. There was nothing to indicate that these entries were made at the instance of the two ladies concerned. While making the assessment for the assessment years 1963-64 and 1965-66, the ITO had not accepted these entries as evidence of the fact that the gifts were acted upon. The assessee did not challenge the order regarding the assessment year 1963-64 and acquiesced in it. The assessment order regarding the assessment year 1965-66 was challenged up to the Appellate Tribunal but before the Tribunal the ground relating to the gifts was not pressed. This conduct of the assessee is very significant and cannot be ignored. For all these reasons no significance can be attached to the debit entries of the sums of Rs. 2,500 in the accounts of each of the two ladies and these entries cannot be taken as evidence of the fact that the gifts were acted upon. The learned counsel for the assessee has not pointed out any other material which would lead to an inference that the gifts in question were accepted by the two ladies or that the possession or the control over the amounts said to have been gifted, was of the said ladies.
14. In view of the above, the answer to question No. 1 should be against the assessee and in favour of the Revenue.
15. In para. 225 of Mulla's Hindu Law, 13th Edn., it has been said that a father can make gifts of ancestral movable property within reasonable limits, without the consent of his sons. The ITO, inter alia, noted that the amounts said to have been gifted to the two ladies were not of reasonable sums. On a consideration of this circumstance and a number of other circumstances, he came to the conclusion that the transfer of the amounts to the two ladies did not amount to gift. The order of the AAC shows that he did not take the above position of Hindu law into consideration in coming to the conclusion that in reality there were no gifts. He based his conclusion on other circumstances whichhave been set out earlier. The grounds on which the Income-tax Appellate Tribunal sought to affirm the order of the AAC too have been set out earlier. The Tribunal no doubt mentioned that the gifts were not of reasonable amounts as they represented almost 2/3rds of the capital of the family, but it is clear from the discussion that the Tribunal had not attached much importance to this circumstance in upholding the conclusion of the AAC that in reality there were no gifts ; the other circumstances which were discussed at length were the main circumstances on which the order of affirmation was passed. In these circumstances, the answer to question No. 2 will have no bearing on the right or liability of the taxpayer and it becomes a purely academic question. We are, therefore, of the view that question No. 2 need not be answered.
16. In view of the foregoing discussion, our answer to question No. 1 is in the affirmative, in favour of the Revenue and against the assessee. Question No. 2 is purely academic and, therefore, it is not being answered.
17. The assessee shall pay costs of these proceedings, which we assess at Rs. 250.