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Naresh Kumar Gupta (Huf) Vs. Wealth-tax Officer/income-tax - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1983)5ITD121(Delhi)
AppellantNaresh Kumar Gupta (Huf)
RespondentWealth-tax Officer/income-tax
Excerpt:
.....(25 years). karta 6. the gifts have been made to the grand-children of the two paternal uncles of shri naresh gupta, the karta and shri ramesh gupta and suresh gupta, the coparceners, while smt. janak rani is related to the paternal uncles since they are her brothers-in-law.7. pages 5, 6, 7, 8 and 9 placed as the assessee's paper book on our file are the copies of declarations relating to 5 gifts and for the sake of convenience, one of the declaration is reproduced hereunder: i, naresh kumar gupta, son of shri jugal kishore gupta, do hereby state that i am the karta of the hindu undivided family known as naresh kumar gupta with the following members including myself:-(iii) sh. ramesh kumar brother of shri naresh kumar gupta,(iv) sh. suresh gupta brother of shri naresh gupta. i, in.....
Judgment:
1. Both the appeals are by the assessee and the assessment year involved is 1978-79.

2. In WT Appeal No. 49 (Asr.) of 1981, the grievance of the assessee relates to the adding back of gifts made by the assessee, at Rs. 49,000, since the WTO as also the learned AAC were of the opinion that in view of the ratio laid down by the Hon'ble Punjab and Haryana High Court in the case of CGT v. Tej Nath [1972] 86 ITR 96 (FB), the HUF could not have made the valid gifts.

3. In IT Appeal No. 164 (Asr.) of 1981, which is an offshoot of the above proposition, the grievance of the assessee relates to adding back of interest amount of Rs. 6,520 on the gifted amount of Rs. 49,000 and the reasoning of the learned lower authorities remain the same as in the case of the wealth-tax.

4. Facts briefly stated are that the assessee made five gifts of Rs. 10,000, Rs. 10,000, Rs. 7,000, Rs. 7,000 and Rs. 15,000 in favour of Master Sudhir Gupta, son of Shri Kamal Kishore Gupta, Master Rakesh Kumar, son of Shri Kamal Kishore Gupta, Master Amit Gupta, son of Shri Anesh Gupta and Smt. Neelam Gupta, Miss Atika, daughter of Shri Anesh Gupta and Smt. Neelam Gupta and Miss Vani, daughter of Shri Garesh Gupta and Smt. Kanchan Gupta, respectively. The first two gifts of Rs. 10,000 each to Master Sudhir Gupta and Master Rakesh Gupta have been made to the grandsons of the paternal uncle of the karta and coparceners of the assessee-HUF, while the three gifts to Master Amit Gupta, Miss Atika and Miss Vani, have been made to the grand-children of Shri Walaiti Ram, another paternal uncle of the karta and coparceners of the HUF. These gifts have been held to be void by the lower authorities relying upon the ratio of the Full Bench decision of the Hon'ble Punjab and Haryana High Court in the case of Tej Nath (supra). The assessee relied upon the ratio of the later decision of the Hon'ble High Court in the case of CIT v. Daljit Singh [1981] 131 ITR 719 (Punj. & Har.).

5. We have heard at length the learned authorised representatives of the parties. We have also perused very carefully the orders of the lower authorities and the paper book since placed on our file (22 pages) for and on behalf of the assessee. The pedigree table of the assessee family stands reproduced hereunder: Late Shri Jugal Kishore (Assessed in the status of HUF) Died in 1968____________________________________________________________| | |Naresh Gupta Ramesh Gupta Suresh Gupta son son son(32 years) (30 years) (25 years). Karta 6. The gifts have been made to the grand-children of the two paternal uncles of Shri Naresh Gupta, the karta and Shri Ramesh Gupta and Suresh Gupta, the coparceners, while Smt. Janak Rani is related to the paternal uncles since they are her brothers-in-law.

7. Pages 5, 6, 7, 8 and 9 placed as the assessee's paper book on our file are the copies of declarations relating to 5 gifts and for the sake of convenience, one of the declaration is reproduced hereunder: I, Naresh Kumar Gupta, son of Shri Jugal Kishore Gupta, do hereby state that I am the karta of the Hindu undivided family known as Naresh Kumar Gupta with the following members including myself:-(iii) Sh. Ramesh Kumar Brother of Shri Naresh Kumar Gupta,(iv) Sh. Suresh Gupta Brother of Shri Naresh Gupta.

I, in consultation and approval of the members of the Hindu undivided family hereby make a gift of Rs. 10,000 through draft this day of 4th July, 1977 to Master Sudhir Gupta minor son of Shri Kamal Kishore Gupta through his guardian/father Shri Kamal Kishore Gupta.Sd/- in English SIGNATURE OF THE DONOR (Rakesh Kumar) Sd/-Sd/- in English (NARESH KUMAR) (Suresh Gupta) I, on behalf of the minor accept the gift of Rs. 10,000 received through draft as a guardian/father.

8. The pedigree table of the assessee family speaks of the fact that there is no minor member in the HUF and the declaration of gifts reproduced above speaks of the fact that the karta of the assessee-HUF has made gifts, 'in consultation and approval of the members of the Hindu undivided family (HUF) and in this view of the matter it cannot be said that the gifts have been made by the karta alone. The gifts on the above stated facts can be held to have been made by the assessee-HUF as a whole, since all the members of the HUF joined together. As such, this is a case of gifts made by HUF and not a case where the gifts have been made by the karta of the HUF without the knowledge, connivance or approval of the other members.

9. In view of the above position, we are of the opinion, that both of the lower authorities have misconceived the facts and the ratio of the Full Bench decision of the Hon'ble Punjab and Haryana High Court in the case of Tej Nath (supra) has got no applicability.

10. The gifts are legal and valid in law and are held to be so, with the result, that the amount of Rs. 49,000 could not have been added back in computing the net wealth of the assessee and we hold accordingly. We also hold that the gifts being valid and legal in the eyes of law, the inclusion of Rs. 6,520 as add-back interest in the income of the assessee was not warranted.

11. The net result is that both the appeals by the assessee succeed and stand allowed.


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