Judgment

HEGDE, J. : This appeal by certificate arises from the judgment of the Andhra Pradesh High Court rendered in its advisory jurisdiction on a case stated by the Income-tax Appellate Tribunal, Hyderabad Bench under Section 26 (1) of the Gift-tax Act, 1958 (to be hereinafter referred to as the Act ). The question referred for the opinion of the High Court was :

"Whether the declaration by which the assessee has impressed the character of joint Hindu family property on the self-acquired properties owned by him amounts to a transfer so as to attract the provisions of the Gift-tax Act."

2. The High Court following its earlier decision in Commr. of Gift-tax v. C. Satyanarayanamurthy (1965) 56 ITR 353 = (AIR 1965 Andh Pra 95); answered that question in the affirmative.

3. The material facts as could be gathered from the statement of the case submitted to the High Court are as follows :

4. The assessee is the karta of his joint family. The assessment year with which we are concerned in this case is 1959-60, for which the "previous year" is the year commencing on 23-10-1957 and ending on 10-11-1958. The assessee owned movable and immovable properties which were his self acquisitions. By a deed dated December 9, 1957, he threw into the common stock his houses bearing Nos 6658-59 and 2731 situate at Imambavidi, Secunderabad and a cash deposit of Rs. 1,50,000/- in the firm of M/s.Goli Eswariah, Paper Merchants, Secunderabad. In the books of account of the firm, necessary entries were made transferring the amount to the account of the family. The Gift-tax Officer treated that portion of the value of the properties so blended in which the assessee ceased to have a right on partition of the family as having been gifted by him to the family. He rejected the contention of the assessee that his act of throwing his self acquired properties into the common stock did not amount to a gift under the act. In appeal, the Appellate Assistant Commissioner took the view that since the deed in question was not registered, there was no transfer of the immovable properties to the family and as such there was no gift of the two houses mentioned earlier but with regard to the sum of Rs. 1,50,000/-, he considered it as a gift and accordingly held that 3/4 th of it was liable to be taxed under the provisions of the Act. Thereafter the matter was taken up in appeal to the tribunal. The tribunal by its order dated November 17, 1961 held that the act by which the asssessee threw his self acquired properties to the family hotchpot did not amount to a transfer and hence it need not have been effected by a registered document. It further held that where the coparcener threw his self acquired properties into the hotchpot of the joint family, there was no element of transfer within the meaning of Section 2, cl. (xxiv) sub-cl. (d) of the Act. At the instance of the Commissioner, Gift-tax, Andhra Pradesh, the tribunal stated a case for the opinion of the High Court and submitted the aforementioned question for its opinion. The High Court did not examine the question of law arising for decision afresh as it was bound by the earlier decision of that High Court in (1965) 56 ITR 353 wherein that Court had held that where a Hindu by a declaration has impressed on his self acquired property the character of joint family property, the same would amount to a transfer of property within the terms of section 2 (xxiv) (d) and as such is a gift as envisaged in S. 2 (xii) and Section 4 (a) of the Act. The view taken in that case was that an act similar to the one we are called upon to consider in this case would amount to a " transaction entered into by and person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person."

5. On the question of law that we are required to decide in this case, there is a sharp cleavage of judicial opinion. The Andhra Pradesh High Court in the case referred to e