Commissioner of Income Tax vs Bharat Prasad Anshu Kumar

Arijit Pasayat, C.J.—Heard. On being moved by the Revenue, the Income Tax Appellate Tribunal, Delhi Bench-B (in short "the Tribunal"), has referred the following question, u/s 256(1) of the Income Tax Act, 1961, for opinion of this court :

"Whether, the Tribunal is correct in law in holding that the making of the gifts of Rs. 75,000 was not void in law and hence the income of Rs. 11,250 (Rs. 7,500 as dividend and Rs, 3,750 as interest) is not includible in the assessment of the assessed (HUF) ?"

As the question itself shows, the basic issue is whether the gift by the Karta to his minor sons is voidable or void. This issue was considered by the apex court in Commissioner of Wealth Tax, T.N. Vs. K.N. Shanmugasundaram, and held that the transaction is voidable and not void. In view of the decision of the apex court, the question referred is answered in the affirmative, in favor of the assessed and against the Revenue. We may clarify that though in the case before the apex court it was related to minor daughters, the position would not be different so far as minor sons are concerned.

The reference stands disposed of.