1. This is a departmental gift-tax appeal in respect of the assessment year 1971-72. The assessee is an individual by status and so assessed to income-tax and wealth-tax. He is also the karta of the HUF which owns two houses. For the accounting year ended 31-10-1970, the assessee out of his withdrawals from the firm of which he is a partner utilised Rs. 18,000 for altering and reconstructing the joint family houses. He had also spent further sum of Rs. 30,000 for the HUF house at Raki village in Rajasthan. There is no dispute that the sum of Rs. 48,000 utilised for reconstruction and renovation of the two houses of the HUF was out of personal funds of the assessee. The GTO assessed this sum of Rs. 48,000 to gift-tax. The AAC cancelled it. The ground raised by the department is as follows: The Appellate Assistant Commissioner erred in deleting the addition of Rs. 48,000 being the amount spent by the assessee individual in reconstructing and renovating the houses property at Rajasthan belonging to the Hindu undivided family.
2. The argument before the AAC was that the assessee had spent the amount for his own comfort. In other words, it is a personal expenditure. This argument was upheld by the AAC. We agree with the reasoning and conclusion of the AAC. The fact that the assessee is an individual and that the other owner of the house property is a HUF which is a separate legal entity, is not at all a material fact. In fact, it is only helpful to the assessee. For purposes of taxation the two may be different entities. But for transfer it may not be two separate entities. We find it difficult to think that this will amount to transfer of a property. Certain money was spent on repair and reconstruction of a house property of HUF of which he himself was the karta. This does not amount to transfer as understood in any law or that expression as explained in the definitions in the Gift-tax Act, 1958, nor will it come within the scope of deemed gift. How could this be a transfer when the benefit or comfort arising out of the repair and reconstruction of the house is equally enjoyed by the donor also. He also shares the benefit or comfort and happiness. We do not also propose to reinforce our conclusion by illustrations of like expenditure--CGT v. Basant Kumar Aditya Vikram Birla  137 ITR 72 (Cal.) which neither under law nor under commonsense will amount to gift either direct or deemed under any law.