V.S. Deshpande, C.J.
(1) The question referred to us for opinion under section 256(1) of the Income-tax Act, 1961, (the Act) by the Income-tax Appellate Tribunal in this case is as follows :
'WHETHERon the facts and in the circumstances of the case, the Tribunal was right in holding that the assessed being female member of the Hindu undivided family has no right to throw her self-acquired property into the common hotchpot of the Hindu undivided family and confirming the assessment of entire income from the said property in the hands of the assessed for the assessment years 1968-69 and 1969-70 ?'
(2) The assessed, who is a female member of a Hindu undivided family, is the owner of a house situated at 109148, Chanakya Puri. She purported to throw one half of the property into the hotchpot of the Hindu univided family by a declaration made on 30th March, 1967. On that basis she filed returns of her income showing 50 per cent of the income from the said property as her income, while the other 50 per cent of the income from the said property as being the income of the Hindu undivided family. The Income-tax Officer, however, held that the assessed being a female member of a Hindu undivided family was not competent to blend any part of her self-acquired property into the hotchpot of the Hindu undivided family. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal have both agreed with the view expressed by the Income-tax Officer. Hence, this reference.
(3) In considering the question referred to us the following considerations are relevant :
(1)The property half interest in which the assessce purported, to transfer by a declaration to the Hindu undivided family is immovable. There are two different ways in which such immovable property can be dealt with. They are (a) blending and (b) gift.
(A)Blending : Blending is very felicitously explained by the Supreme Court per Chandrachud J. (as his lordship then was) in Pushpa Devi v. Commissioner of Income-tax, New Delhi. : 109ITR730(SC) , in the following words :
'THEtheory of blending under the Hindu law involve the process of a wider sharing of one's own properties by permitting the members of one's joint family the privilege of common ownership and common enjoyment of such properties. But while introducing new shares in one's exclusive property, one does not by the process of blending efface on self by renouncing one's own interest in favor of others. To blend is to share along with others and not to surrender one's interest in favor of others to the exclusion of oneself. If a Hindu female, who is a member of an undivided family, impresses her absolute, exclusive property with the character of joint family property, she-creates new claimants to her property to the exclusion of herself because, not being a coparcener, she has no right to demand a share in the joint family property by asking for a partition. She has no right of survivorship and is entitled only to be maintained out of the joint family property. Her right to demand a share in the joint family property is contingent, inter alia, on a partition taking place between her husband and his sons (see Mulla's Hindu Law, 14th edition page 403, para 315). Under section 3(2) and (3) of the Hindu Women's Right to Property Act, 1937, her right to demand a partition in the joint family property of the Mitakshara joint family accrued on the death of her husband. Thus, the expression 'blending' is inapposite in the case of a Hindu female who puts her separate property, be it her absolute property or limited estate, in the joint family stock'. HENCEthe assessed is a female member of the Hindu undivided family she could not blend half of her self-acquired property with the property of the Hindu undivided family for the reasons explained by the Supreme Court above.
(B)GIFT : Mr, M. B. Lal, learned counsel for the assessed argued that since the transaction purported to be one of blending cannot in law amount to blending, it should be deemed to be a gift. The result would be the same, namely, half of the immovable property of the assessed would remain transferred to the Hindu undivided family and, thereforee, the income of that half of the property would be assessable as the income of the Hindu undivided family. He relies on the observation of the Supreme Court in Pushpa Devi's case at page 739 of the report that 'there is no serious controversy that by the declaration dated Sep. 1, 1961, the appellant must be deemed to have made a gift of the items mentioned therein to the undivided family of which she was a member'. The learned counsel contends that because of these observation of the Supreme Court any transaction which fails to be blending in law must be deemed to be a gift in law. He stresses the meaning of the word 'deem' to mean that what is not really a gift must, however, be deemed to be a gift because the Supreme Court has said so.
(4) The decisions which the learned counsel cited in support of his argument are Commissioner of Income-tax v. Messrs Bhogilal Laherchand, : 25ITR50(SC) , and Commissioner of Income- tax v. Bombay Trust Corporation Ltd. . In Bhogilal Laherchands case : 25ITR50(SC) the term 'deem' used by section 4 of the Income-tax Act, 1922 brought within the net of chargeability income not actually accrued but which is supposed notionally to have accrued. In Bombay Trust Corporation case , it is said that when a person is deemed to be something the only meaning possible is that whereas he is not in reality that something the law treats him as if he were such. We agree that the legislature can by fiction confer a certain legal character on a transaction even though the real nature of that transaction is different. We think that the learned counsel need not have gone beyond the Gift-Tax Act, 1958 for an apt illustration of such a deeming provision. In section 4 of the said Act transactions which are for consideration and would not, thereforee, be gifts under Chapter Vii of the Transfer of Property Act are nevertheless deemed to be a gift for the purposes of the Gift-Tax Act. But this reasoning and these decisions have no application to the present case. When the learned counsel argues that the declaration by the assessed should be treated as a gift he is not relying on any legislative provision which deems it to be a gift. He relies on the observation of the Supreme Court in Pushpa Devi's case.
(5) The facts in Pushpa Devi's case were as follows : The declaration made by the female assessed in that case related to her share in the business of running a cinema house and in the capital investment made in that business. At page 734 of the report the very question referred by the Tribunal to the High Court for opinion was whether there was a gift of the appellant's capital investment and her share in the business in favor of the Hindu undivided family. By its order, dated 31-1-1977 the Tribunal took the view that there was a gift by the appellant in favor of the Hindu undivided family and that the latter had accepted the gift. At page 739 reference is made to the finding of the Tribunal that the declaration dated September 1, 1961 must be deemed to have been made of the items mentioned therein to the Hindu undivided family. The finding of the Tribunal was one of fact in so far as the donor made a gift the donee accepted it. It was also one of law because the gift being of movable property was valid without a registration instrument. The gift as such was, thereforee, valid as a gift. Why did the Supreme Court then 'deem' it to be a gift? Why did it not say that in fact there was an actual gift? The reason is clear from the facts of the case. The declaration of September 1, 1961, was not one of gift. On the other hand, it was one of blending. The facts not being in dispute the Supreme Court could take the view along with the Tribunal that the legal nature of the transaction was one of gift, though the assessed purported to make it one of blending. The meaning of the word 'deem' used by the Supreme Court in that context was that though the assessed intended the transaction to be of blending in law it amounted only to a gift. This legal finding could be given because the requirements of a valid gift were satisfied. These requirements were (1) transfer of possession by the donor, (2) acceptance by the donee, and (3) a mere declaration about the true gift without the necessity of registration because the property was movable.
(6) In the present case, however, the property is immovable. A gift of immovable property under Chapter Vii of the Transfer of Property Act and section 17 of the Registration Act can be made only by a registered instrument. A transaction which is incapable of being a gift in the absence of registration cannot be deemed to be a gift unless the legislature overrides Chapter Vii of the Transfer of Property Act and section 17 of the Registration Act to deem it as a gift by a fiction. There is no such legislation to support the contention of the counsel for the assessed.
(7) In Goli Eswariah v. Commissioner of Gift-tax, A.P. : 76ITR675(SC) , the unilateral declaration of a Hindu coparcener whereby he purported to throw his immovable self-acquired property into the common stock of joint family property did not amount to a transfer either under Chapter Vii of the Transfer of Property Act or under section 2(xxiv)(d) of the Gift-tax Act, 1958 for the simple reason that while blending is unilateral act in which the acceptance is not necessary, a gift is a bilateral act in which the donor has to give possession and the donee has to accept it. In Goli Eswariah's case the property was immovable. Because the unilateral declaration was made by a male coparcener the transaction amounted to blending. It did not amount to a gift because it was not a bilateral transaction. Had it not been blending and had it been a gift then the necessity of registration also would have arisen.
(8) In Commissioner of Gift-tax, Delhi v. Munshi Lal : 85ITR129(Delhi) the Head Note says that it would make no difference in principle so far as the applicability of the Gift-tax Act, 1958 is concerned whether the separate property is impressed with the character of joint family property by male member of the family or by a female member of the family and the act of either of them amounts to blending and, thereforee, did not amount to gift. But a reading of the judgment shows that the distinction between the competency of male coparcener and the incompetency of a female coparcener in respect of blending was not a question which was considered by the Delhi High Court in that case. This has been pointed out by the Supreme Court in Pushpa Devi's case in considering this judgment of the Delhi High Court. This judgment is not an authority to show that the female assessed could blend her property with the property of the Hindu undivided family. Nor is it an authority that the transaction in respect of immovable property could be deemed to be a gift without registration merely because it fails to qualify to be blending.
(9) We, thereforee, agree with the Tribunal that the applicant being a female member of the Hindu undivided family had no right to blend half of her immovable property with the Hindu undivided family property. We further clarify that this transaction could not amount to a transaction of gift as the property was immovable and no gift of it could be made without registration. The result is that the immovable property which was subject of the declaration, dated 30th March, 1967 remained with the applicant assessed and its entire income was rightly assessed in her hands for the year 1968-69 and 1969-70. The reference is answered accordingly. No order as to costs.