Commissioner of Wealth Tax vs A. Venkateswaran and Others

R. Jayasimha Babu, J.—The questions referred to us are required to be answered in favour of the assessee and against the Revenue, in the

light of the decision of this court in the case of Commissioner of Wealth-tax Vs. T. Saraswathi Achi, .

The assessee herein had thrown certain shares in the hotchpot by impressing the same with the character of the joint family property and

thereafter, entered into a partition by which were allotted shares in certain limited companies to the minor son. Subsequently, bonus shares were

allotted to the minor son.

The Tribunal has held and rightly, in our opinion, that the value of the bonus shares subsequently received by the minor son after the partition,

cannot be regarded as property transferred or ""converted property"" for the purpose of Section 4(1)(a) of the Wealth-tax Act. The converted

property referred to in that provision is the property that was in the hands of the individual and which was sought to be converted into joint family

property. The property, which was not in the [assessee''s] hands cannot be regarded as property converted. The fact that the property, while in the

hands of the minor son enabled the son to receive further property in the form of bonus shares would not impress those bonus shares with the

character of converted property.

The questions referred to us regarding the correctness of the order of the Tribunal are, therefore, answered in favour of the assessee and against

the Revenue.