Gift-tax Act 1958 s.26(1)

Gift-tax Act 1958 s.26(1) — the law in short

What the courts have decided on section Gift-tax Act 1958 s.26(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Pushpa Devi v. CIT — the right to blend is limited to coparceners, so a Hindu female who is not a coparcener cannot throw her separate property into the family stock Supreme CourtHelps department
  A lady member of a Hindu undivided family made a sworn declaration throwing her own money and her share in a business into the family stock, and the family has been offering the income ever since. The Assessing Officer says the income is still hers. Who is right?
  On these facts the Assessing Officer. The Supreme Court held that the true rule of blending is that the right to blend is limited to coparceners: it is the coparcener who alone can blend his separate property with joint family property, and the right is not available to a female who, though a member of the joint family, is not a coparcener — and it makes no difference whether the separate property is her absolute property or one in which she has a limited estate. The income was therefore not assessable in the hands of the family on the footing of blending. The Court nevertheless allowed the appeal in part on the second question: the declaration was held to amount to a gift by the appellant to the undivided family, and the income of the property so gifted was directed to be brought to tax consistently with that finding and in accordance with law.
• Goli Eswariah v. CGT — throwing self-acquired property into the common stock is a unilateral act and no transfer at all (Gift-tax Act, 1958) Supreme CourtHelps taxpayer
  My client impressed his self-acquired property with the character of joint family property by a declaration. The department says he has made a gift to the family. Is a declaration of blending a transfer?
  No. The Supreme Court held that the declaration by which the assessee impressed the character of joint Hindu family property on his self-acquired properties did not amount to a transfer, and so did not attract the Gift-tax Act, 1958. The act by which a coparcener throws his separate property into the common stock is a unilateral act: there is no question of the family rejecting or accepting it, no donor and no donee, and no gift under Chapter VII of the Transfer of Property Act. "Transaction entered into" in s.2(xxiv)(d) of the Gift-tax Act contemplates an act to which two or more persons are parties and cannot apply to a unilateral act, and "disposition" in the opening words of s.2(xxiv), read with the company it keeps, refers to a bilateral or multilateral act. THE ACT CONSTRUED IS THE GIFT-TAX ACT, 1958.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.