JUDGMENT JUDGMENT judgment of court was delivered by V. S. DAVE J.-This reference has been sent by Income-tax Appellate Tribunal along with statement of case, dated November 25, 1975, under section 26(1) of Gift-tax Act, 1958 (hereinafter referred to as " Act "). Tribunal has referred following questions to this court for its opinion: "1. Whether, on facts and circumstances of this case and on correct reading and interpretation of agreement dated October 21, 1957, and partnership deed dated November 1, 1957, Smt. Vidyawati Rathi was possessed of any property within meaning of section 14 of Hindu Succession Act, 1956? 2. Whether, on correct interpretation of provisions of section 3(2) and (3) of Hindu Women's Rights to Property Act, XVIII of 1937 (as amended by XI of 1938) and sections 4 and 14 of Hindu Succession Act, Tribunal was right in holding that on death of Seth Vithal Das, husband of Smt. Vidyawati Rathi, in year 1951, share of Smt. Vidyawati Rathi became fixed, i.e., 1/3rd of estate left by Seth Vithal Das, and this 1/3rd share was possessed by Smt. Vidyawati Rathi on date of passing of Hindu Succession Act, i.e., on June 17, 1956, and this 1/3rd share became her absolute property? 3. Whether Tribunal was right in holding that Smt. Ganga Devi, grandmother, was not entitled to any share either on death of Seth Vithal Das or on passing of Hindu Succession Act, 1956? 4. If answer to question No. 3 is in affirmative, what was share of Smt. Ganga Devi? 5. Whether, on facts and circumstances of this case, in determining share possessed by Smt. Vidyawati Rathi on coming into force of Hindu Succession Act, all liabilities including book debts and properties allotted to Smt. Vidyawati Rathi and Smt. Ganga Devi had to be taken into consideration? 6. Whether, on facts and in circumstances of case, Tribunal was right in holding that assessee by giving up her share or interest in joint family property in favour of her two sons transferred property within meaning of section 2(xxiv) of Gifttax Act, 1958, and thus made gift as defined by section 2(xii) of Act? 7. Whether, on facts and in circumstances of case, Tribunal was right in giving finding in alternative that act of assessee amounts to deemed gift within meaning of section 4(c) of Act? 8. Whether, on facts and in circumstances of case, Tribunal was right in holding that gift was liable to be assessed in assessment year 1958-59 and not in 1959-60? 9. Whether, on facts and in circumstances of case, Tribunal was right in holding that notice dated February 12, 1965, issued by Gift- tax Officer under section 16(1)(a) of Gift-tax Act. 1958, was within time? 10. Whether, on facts and in circumstances of case and also in view of provisions of Hindu law, Hindu Women's Rights to Property Act and Hindu Succession Act, Smt. Vidyawati Rathi made gift of property valued at Rs. 8,01,074 and same is liable to gift-tax under Gift- tax Act, 1958? " This reference has been made at instance of assessee, Smt. Vidyawati Rathi, and pertains to assessment year 1958-59. assessee was assessed under Gift-tax Act where she was taxed on sum of Rs. 7,92,074 considering value of gift as Rs. 8,01,074. assessee filed return of gift as "individual ". assessee is widow of Seth Vithaldas Rathi who died in year 1951. She is widowed mother of Sarv/Sh. Seth Mukunddas Rathi and Seth Gokuldas Rathi, coparceners of Hindu undivided family, styled as M/s. Thakurdas Khinvraj, Beawar, which owns movable and immovable properties. After death of her husband, she inherited same rights in Hindu undivided family properties which were possessed by her late husband, namely, Seth Vithaldas Rathi, at time of his death by virtue of section 3(2) of Hindu Women's Rights to Property Act, 1937. It would be pertinent to mention genealogical table which is given below: Damodardas (deceased) Widow Sethani Gangabai Vithaldas (deceased) Widow Smt. Vidya wati (assessee) ------------------------ Mukunddas Gokuldas 1 son and 1 son and 1 daughter 3 daughters. Seth Damodardas died in year 1920 leaving behind his wife, Sethani Gangabai, and son, Seth Vithaldas. After death of Seth Vithaldas in year 1951, family jewellery was divided amongst members of family on or about April 9, 1952. On October 21, 1957, agreement was made between Seth Mukunddas, Seth Gokuldas and Sethani Gangabai and assessee whereby arrangement was made in respect of assets of family. copy of this agreement is annexure " " to statement of case. Under this agreement, it was decided that during lifetime of Sethani Gangabai and assessee, Seth Mukundas and Seth Gokuldas shall keep joint mess and shall divide expenses between themselves every year in equal proportions irrespective of any disparity in number of members of family of either of them. By said agreement, it was also agreed that Seth Mukunddas and Seth Gokuldas shall divide between themselves net assets of each of businesses hithertofore carried on by family determined after taking into account all back debts due to or by each such business and assets including stock-in-trade, cash balances at bank and at hand but excluding immovable properties comprised in assets thereof and after division of assets as aforesaid, both parties named above may carry on respective business in partnership under existing or any other names or styles as they may agree. existing businesses of family are enumerated in annexure " " to said agreement. said agreement also provided for division in equal proportion between Seth Mukunddas and Seth Gokuldas of shares and securities mentioned in annexure " B " to said agreement. As regards immovable properties belonging to family, which were mentioned in annexure " C " to agreement, it was provided that same shall continue to be assets of family so long as Seth Mukunddas and Seth Gokuldas do not agree to partition same and if and when they decide to partition not agree to partition same and if and when they decide to partition same, the), may do so and divide same between themselves in equal proportion. said, agreement further provided that if Seth Mukunddas and Seth Gokuldas abide by advice tendered in agreement, assessee and Sethani Gangabai would not claim any share in said immovable properties upon such partition or division, nor would they claim any share in division of businesses and their assets made in pursuance of advice and guidance given in agreement as they were contented with whatever assets they already had. In accordance with aforesaid agreement dated October 21, 1957, entry was made in books of M/s. Thakurdas Khinvraj on October 24, 1957, wherein it was mentioned that after excluding immovable properties and liabilities to extent of Rs. 9,93,107.37, assets of, joint family are Rs. 24,03,221,11 which amount has been divided in equal shares as per agreement dated October 21, 1957, and on that basis Rs. 12,01,610,55 was credited in name of Seth Mukunddas and Rs. 12,01,610,56 was credited in name of Seth Gokuldas. copy of aforesaid entry in books of M/s. Thakurdas Khinvraj is annexure " B " to statement of case. Seth Mukunddas and Seth Gokuldas entered into partnership to carry on business in name of Seth Thakurdas Khinvraj with effect from October 24, 1957. terms and conditions of partnership were set out in partnership deed executed by them on November 1, 1957, copy of which is annexure " F " to statement of case. copy of partnership deed was submitted before Income-tax Officercum-Gift-tax Officer on April 18, 1958. Gift-tax Officer, Beawar, issued notice dated February 12, 1965, under section 16(1) of Act to assessee wherein it was stated that on partition of joint family properties, whether partial or complete, assessee, as member, was entitled to share equal to that of her son and that assessee was entitled to 1/3rd share, viz., Rs. 8,01,073-70 in assets worth Rs. 24 lakhs odd in respect of which partition was done and since assessee has not taken her aforesaid share, she has gifted her share to her sons, Seth Mukunddas and Seth Gokuldas. In response to aforesaid notice, assessee submitted return stating that provisions of Act were not attracted as she has not made any gift taxable under Act. assessee came out with case of partial partition and submitted that in agreement itself decision wits taken regarding business assets of family, jewellery and household belongings having been already divided and that immovable properties of family continued to be owned and possessed by joint family. It was submitted that family is governed by Mitakshara branch of Hindu law and object and purpose of family arrangement was to ensure maintenance of good relations between several members of family. It was further submitted that this was all done with mutual consideration. Gift-tax Officer, however, did not agree with contention of assessee that provisions of Gift-tax Act are not applicable and by his order dated December 16, 1965, he held that only documentary evidence of partition is entry in account books of family whereby Rs. 24,03,221.11 have been equally divided between Seth Mukunddas and Gokuldas and since assessee was entitled to 1/3rd share in this amount, it shall be considered as if assessee has relinquished, surrendered, forfeited or abandoned her 1/3rd share valued at Rs. 8,01,073.70 in favour of her two sons which amounts to gift and hence provisions of section 2(xxiv)(d) of Gift-tax Act read with section 4(1)(c) of Act are attracted. Aggrieved by this order of Gift-tax Officer, assessee appealed to Appellate Assistant Commissioner of Gift-tax, Ajmer Range, Ajmer. In said appeal, it was contended on behalf of assessee that notice issued under section 16(1) of Act was barred by limitation because after partial partition, Seth Mukunddas and Seth Gokuldas formed partnership and deed of partnership was submitted to Income-tax Officer-cum-Gift-tax Officer on April 18, 1958. On that date, Gift-tax Officer was fully aware that partial partition had taken place and recourse should have been taken to provisions of section 16(1) of Act within period of four years from that date and that notice dated February 12, 1965, was barred by limitation. It was also contended by assessee that partial partition took place on October 24, 1957, and relevant assessment year was 1959-60 and that assessment to gift-tax had been wrongly made in assessment year 1958-59 on basis that gift was made on October 21, 1957. Apart from these objections, assessee made submissions on merits and contended that Gift-tax Officer had erred in holding that deemed gift had been made under section 4(c) of Act. It was also submitted that even if it was treated to be deemed gift, since there were four coparceners comprising Gokuldas, Mukunddas, Sethani Gangabai and assessee, assessee was in fact entitled to 1/4th share and not 1/3rd share and that value of deemed gift would work out to Rs. 6,00,000 and not Rs. 8,00,000. Appellate Assistant Commissioner by his order dated April 15, 1971, allowed said appeal of assessee. Appellate Assistant Commissioner rejected contention of assessee that notice dated February 12, 1965, issued under section 1-6(1) of Act was barred by limitation because there is no evidence to establish that Income-tax Officer/Gift-tax Officer had gone into details of partnership deed on April 18, 1958, and that orders accepting partial partition were passed at much later stage and that it was only at that stage that Income-tax Officer became aware that assessee would be liable to gift-tax. Appellate Assistant Commissioner accepted contention of assessee that material date on which gift can be said to have been completed by virtue of surrender and relinquishment was October 24, 1957, and not October 21, 1957, and said date October 24, 1957, does not fall in assessment year I958- 59 but it falls in assessment year 1959-60 and that Gift-tax Officer should have assessed deemed gift, if at all, in assessment year 1959-60. Appellate Assistant Commissioner also held that provisions of section 4 read with section 2(xxiv)(d) of Act are not applicable to case of assessee and no deemed gift can be said to have been made. In this connection, Appellate Assistant Commissioner has held that partition of property of Hindu undivided family does not amount to transfer in legal sense and it does not attract section 2(xii) read with section 2(xxiv)(d) of Act. As regards applicability of section 4(c), he held that it would not apply if partition is genuine and bona fide. He also held that no complete partition had taken place genuine and bona fide. He also held that no complete partition had taken place and there still remained in fact immovable property to which, at time of final partition, assessee can claim her full share and there cannot be said to have been any release, discharge, surrender or forfeiture or abandonment of her rights in joint family properties within scope of section 4. On that view, Appellate Assistant Commissioner did not deal with contentions of assessee regarding improper allocations of shares at time of partial partition as determined by Gift-tax Officer. Revenue went up in appeal before Income-tax Appellate Tribunal. Tribunal accepted appeal of Revenue and set aside order of Appellate Assistant Commissioner and restored order of Gift-tax Officer. Income-tax Appellate Tribunal considered various aspects of matter and its findings are summarised as under: 1. Smt. Gangabai would not get any right, interest or share in Hindu undivided family property as her husband had expired prior to commencement of Hindu Women's Rights to Property Act, 1937. 2. assessee acquired same interest in Hindu undivided family property which her husband had by virtue of section 3(ii) of aforesaid Act and this share, unlike shares of coparceners, was defined and unfluctuating and in view of section 14 of Hindu Succession Act, 1956, she became absolute owner of property left by her husband in 1951 and she had every right to transfer, give up, surrender or abandon her share. 3. share of assessee in property in question was 1/3rd and not 1/4th as claimed by assessee. 4. assessee had share to extent of Rs. 8,01,073.70 in property of Hindu undivided family worth Rs. 24,41,221.11 which was partitioned on October 24, 1957, and on that date she had definite and transferable share in property and she had full right of disposition of same and instead of taking it on partition, she had transferred or abandoned or given away same in favour of her two sons, Mukunddas and Gokuldas. This transfer was either disposition, conveyance or assignment or delivery or alienation within meaning of section 2(xxiv) of Act. By transferring her right or interest in favour of her two sons, assessee had gifted her property in favour of her two sons and case was covered by section 2(xii) read with section 2(xxiv) of Act. 5. case was also covered by section 4 of Act because assessee has given up ownership of her share in respect of Rs. 24 lakhs odd in favour of her two sons without consideration in money or money's worth and there is no convincing evidence on record to show that transaction in question was bona fide. 6. notice issued by Gift-tax Officer under section 16(1)(a) of Act is valid. There is nothing on record to show that Gift-tax Officer applied his mind on April 18, 1958, to ascertain that there took place partial partition and in consequence thereof, there was any gift under section 2(xxiv) or section 4(c) of Act. It is common ground that in assessment year 1958-59, assessee did not disclose any taxable gift which had escaped assessment and under circumstances, Gift-tax Officer was within his rights to start proceedings under section 16(1)(a) of Act within eight years. 7. In income tax assessment for assessment year 1958-59, two different previous years have been determined and second previous year expired on December 31, 1957. In view of section 2(xx)(b) of Act and section 3 of Income-tax Act, 1961, assessee was rightly assessed on gift in question in assessment year 1958-59. Thereafter, assessee moved application under section 26(1) of Act which has given rise to this reference. At outset, we may mention that during course of his arguments before us, Shri N. M. Ranka, learned counsel for assessee, did not assail findings recorded by Tribunal in relation to questions Nos. 8 and 9. We have also perused said findings of Tribunal and we find no infirmity in same. said questions must, therefore, be answered against assessee and in favour of Revenue. As regards questions Nos. 3 and 4 which relate to share of Smt. Gangabai in joint family properties, Shri Ranka has not disputed that Shri Damodardas, husband of Smt. Gangabai, died in year 1920, i.e., before enactment of Hindu Women's Rights to Property Act, 1937 (hereinafter referred to as " Act of 1937"), and rights of Smt. Gangabai are governed by Mitakshara law that was applicable prior to enactment of Act of 1937. Under Mitakshara law, as it stood prior to Act of 1937, widow does not succeed to estate of her husband as his heir and she is entitled only to maintenance out of her husband's separate property and out of property in which he was coparcener at time of his death. Under said law, widow has also right to reside in family dwelling house in which she lived with her husband. claim of widow for maintenance is not charge upon estate of her deceased husband, whether joint or separate. This may be done by widow getting her maintenance determined and specifically charged on joint family property either by agreement or decree or order of court. Since right of widow to be maintained does not give her any interest in joint family property, said right is not " jus in rem ", i.e., right in property, but it is " jus ad rem ", i.e., right against joint family property. If specific property is allotted to widow in lieu of her claim to maintenance under agreement or decree or order of court and she was in possession of same on date of coming into force of Hindu Succession Act, 1956 (hereinafter referred to as " 1956 Act "), then by virtue of provisions contained in sub-section (1) of section 14 and Explanation thereto, widow would become absolute owner of said property with effect from date of coming into force of 1956 Act (See Vaddeboyina Tulasamma v. Vaddeboyina Sesha Reddi, AIR 1977, SC 1944). It is not case of assessee that Smt. Gangabai had got her maintenance determined and specifically charged on joint family property by agreement or decree or order of court or that any specific property was allotted to her in lieu of her maintenance under agreement or decree or order of court and she was in possession of same on date of coming into force of 1956 Act. In circumstances, Smt. Gangabai had only right to force of 1956 Act. In circumstances, Smt. Gangabai had only right to claim maintenance out of joint family property but she did not have any interest in joint family property and she did not acquire any share in joint family property under provisions of 1956 Act. Tribunal was, therefore, right in holding that Smt. Gangabai was not entitled to any share in joint family property either on death of Seth Vithal Das or on passing of Hindu Succession Act, 1956. Question No. 3 must, therefore, be answered in affirmative. In view of answer to question No. 3 that Smt. Gangabai was not entitled to any share in joint family property, question No. 4 does not arise. We may now consider remaining questions. Out of them, questions Nos. 1, 2 and 5 relate to, rights acquired by assessee in joint family properties under Act of 1937 and 1956 Act. Questions Nos. 6 and 7 relate to interpretation of provisions of sections 2(xii), 2(xxiv) and 4(c) of Act. Question No. 10 is general in nature and it will have to be answered in light of answers given to questions Nos. 1, 2, 5, 6 and 7. Since questions Nos. 1, 2 and 5 are interdependent, they will be dealt with together. Before we consider submissions of learned counsel for assessee and learned counsel for Revenue, we may refer to relevant provisions of Act of 1937 and 1956 Act. As family of assessee is governed by Mitakshara law, relevant provisions of Act of 1937 are section 3(2) and (3) which read as under: " S. 3. (2) When Hindu governed by any school of Hindu law other than Dayabhaga school or by customary law dies having at time of his death interest in Hindu joint family property, his widow shall, subject to provisions of sub-section (3), have in property same interest as he himself had. (3) Any interest devolving on Hindu widow under provisions of this section shall be limited interest known as Hindu Women's estate, provided however that she shall have same right of claiming partition as male owner. " relevant provisions of 1956 Act are contained in section 14 which reads as under: "S. 14. (1) Any property possessed by female Hindu, whether acquired before or after commencement of this Act, shall be held by her as full owner thereof and not as limited owner. Explanation.-In this sub-section,'property' includes both movable and immovable property acquired by female Hindu by inheritance or devise, or at partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as'stridhana' immediately before commencement of this Act. (2) Nothing contained in sub-section (1) shall apply to any property acquired by way of gift or under will or any other instrument or under decree or order of civil court or under award where terms of gift, will or other instrument or decree, order or award prescribe restricted estate in such property. " Shri N. M. Ranka, learned counsel for assessee, has urged that prior to enactment of Act of 1937, Hindu widow was not given any interest in property of her husband at time of his death and she was only entitled to maintenance. By section 3(2) of Act of 1937, Hindu widow was given interest in property of her husband and her rights were same which were with her husband at time of his death. By section 3(3) of Act of 1937, she was given right to claim partition of interest devolving on her under section 3(2) of Act. Learned counsel has submitted that as result of aforesaid provisions, Hindu widow, though not coparcener is introduced into coparcenary. According to Shri Ranka, Hindu widow does not take in joint family property, defined and divided share as if husband had separated from joint family at time of his death, but she takes undefined and fluctuating interest in joint family which husband himself had till moment of his death and that the, share of Hindu widow gets defined and fixed when she claims partition. said interest which was given to Hindu widow under Act of 1937 was limited interest in sense that on death of widow her interest would pass by survivorship to coparceners if widow died without any partition having taken place and it would devolve on heirs of her husband if she died after partition. Shri Ranka has also submitted that this position of Hindu widow continued till 1956 Act came into force and thereafter by enactment of 1956 Act, limited interest of Hindu widow in joint family property was converted into her absolute property with full powers of disposal and restrictions and limitations that were imposed on her in matter of disposal of property ceased to exist. In support of his aforesaid submissions, Shri Ranka has placed reliance on decision of Privy Council in Attorney-General of Ceylon v; Ar. Arunachalam Chettiar [1958] 34 ITR (ED) 20 (PC) and decisions of Supreme Court in Potti Lakshmi Perumallu v. Potti Krishnavenamma, AIR 1965 SC 825, Satrughan Isser v. Sabujpari, AIR 1967 SC 272, CED v. Alladi Kuppuswamy [1977] 108 ITR 439 (SC) and R. B. S. S. Munnalal v. S. S. Rajkumar, AIR 1962 SC 1493. Shri Ranka has also urged that it is fully borne out from record that complete partition did not take place in family of assessee and, therefore, share of assessee in joint family property could not be said to have been fixed or crystallised and that it remained fluctuating. submission of Shri Ranka is that partition which took place on October 24, 1957, was only partial and not complete and that share of assessee in joint family property would be ascertainable only when complete partition takes place. Shri R. N. Surolia, learned counsel for Revenue has supported findings recorded by Tribunal and has submitted that on death of her husband, Seth Vithal Das, in 1951, assessee acquired interest to extent of share of her husband on date of his death in joint family property under Act of 1937 and that said share was fixed and was not fluctuating and that after enactment of 1956 Act assessee became absolute owner of that share in joint family property. Shri Surolia has urged that demand for partition is not essential for purpose of crystallisation of rights that had accrued to assessee under Act of crystallisation of rights that had accrued to assessee under Act of 1937. In support of his aforesaid submission, Shri Surolia has placed reliance on decisions of Supreme Court in Sukh Ram v. Gauri Shankar, AIR 1968 SC 365, State of Maharashtra v. Narayan Rao Sham Rao Deshmukh [1987] 163 ITR 31 (SC), Smt. Raj Rani v. Chief Settlement Commissioner, AIR 1984 SC 1234 and Gummalapura Taggina Matada Kotturuswami v. Setra Veeravva, AIR 1959 SC 577. While dealing with questions Nos. 3 and 4, we have indicated that under Mitakshara law, as it stood prior to enactment of Act of 1937, widow did not succeed to estate of her husband as his heir and she was only entitled to maintenance out of her husband's separate property and not out of property in which he was coparcener at time of his death and claim of widow for maintenance was not charge upon estate of her deceased husband, whether joint or separate. Act of 1937 is measure of social reform which was enacted to redress disabilities and to give better rights to women by recognising their claim to fair and equitable treatment in certain matters of succession. Section 3 of said Act makes provision for devolution of property of Hindu who dies intestate. Sub-section (1) of section 3 relates to devolution of property of Hindu governed by Dayabhaga school of law as well as separate property of Hindu governed by any other school of law or by customary law and it provides that in said property, widow would be entitled to same share as son. In respect of interest of Hindu governed by school of Hindu law other than Dayabhaga school or by customary law in Hindu joint family property, provision is made in sub-section (2) of section 3 which provides that widow of such person shall have in joint family property same interest as her husband himself had. Sub-section (3) of section 3 declares that interest devolving on Hindu widow under provisions of this section shall be limited interest known as Hindu women's estate and it confers right on her to claim partition as male owner. provisions of sub-sections (2) and (3) of section 3 of Act of 1937 came up for consideration before Supreme Court in Potti Lakshmi Perumallu v. Potti Krishnavenamma, AIR 1965 SC 825. Till then there was certain amount of conflict in decisions of various High Courts. One view was that quantum of interest to which Hindu widow is entitled under section 3(2) of Act of 1937 is to be determined as on date on which she seeks to enforce partition under sub-section (3) of section 3. other view was that it has to be determined as on date on which her husband died, that is to say, that it was not fluctuating interest increasing or decreasing as result of deaths or births in family. Supreme Court, after considering decisions of various High Courts, approved first view and have observed (at page 829): " various decisions to which we have adverted rest on view that interest which law has conferred upon widow is new kind of interest though in character it is what is commonly known as Hindu widow's estate. This interest is in substitution of her right under pre-existing Hindu law to claim maintenance. decisions also recognise that though widow does not, by virtue of interest given to her by new law, become coparcener, she being entitled to claim partition of joint family property, is in same position in which her deceased husband would have been in matter of exercise of that right. That is to say, according to those decisions her interest is fluctuating one and is liable to increase or decrease according as there are deaths in or additions to members of family or according as there are accretions to or diminutions of property. In our opinion, these decisions lay down law correctly." learned judges have further observed (at p. 830): "When Act says that she will have same right as her husband had, it clearly means that she would be entitled to be allotted same share as her husband would have been entitled to had he lived on date on which she claimed partition." same view has been reiterated by Supreme Court in Satrughan Isser v. Sabujpari, AIR 1967 SC 272, wherein it has been held that interest acquired by Hindu widow under section 3(2) of Act of 1937 gets defined as soon as unequivocal demand for partition is made by her. In that case, it has been laid down that if Hindu widow dies before seeking partition, interest acquired by her would merge into coparcenary property but if she dies after partition, interest in coparcenary property which has vested in her will devolve upon heirs of her husband. In CED v. Alladi Kuppuswamy [1977] 108 ITR 439, Supreme Court has-reaffirmed law laid down in above mentioned cases and it has been observed (headnote): " In other words, after her husband's death Hindu widow under Act of 1937 has got right to demand partition, she cannot predicate exact share which she might receive until partition is made, her dominion extends to entire property conjointly with other members of coparcenary, her possession and enjoyment is common, property cannot be alienated without concurrence of all members of family, except for legal necessity, and like other coparceners she has fluctuating interest in property which may be increased or decreased by deaths or additions in family." In view of decisions of Supreme Court referred to above, it must be held that Hindu widow who acquires interest of her husband in Hindu coparcenary by virtue of section 3(2) of Act of 1937, though not coparcener, is member of Hindu coparcenary. Her exact share in joint family property cannot be predicated until partition is made and till then, like other coparceners, she has fluctuating interest in property which may be increased or decreased by deaths or additions in family. We have looked into decisions on which reliance has been placed by learned counsel for Revenue and we are of view that said decisions have no bearing on question in issue, viz., nature of rights conferred on Hindu widow by sections 3(2) and 3(3) of Act of 1937. In State of Maharashtra v. Narayan Rao Sham Rao Deshmukh [1983] 163 ITR 31 (SC) and Raj Rani v. Chief Settlement Commissioner, AIR 1984 SC 1234, husband had died after coming into force of 1956 Act and rights of widow were governed by provisions of 1956 Act and not by Act of 1937. In Sukh Ram v. Gauri Shankar AIR 1968 SC 365, and G. T. M. Kotturuswami v. Setra Veeravva, AIR 1959 SC 577, court has construed provisions of section 14 of 1956 Act. We may now examine impact of 1956 Act on rights which accrue to Hindu widow under Act of 1937. 1956 Act, by amending and codifying law of intestate succession amongst Hindus, brings about some fundamental and radical changes in law of succession. important feature of 1956 Act is enlarging of Hindu women's limited estate into full ownership under section 14. In cases where Hindu widow has acquired Hindu women's estate under sections 3(2) and 3(3) of Act of 1937, said limited interest of widow is converted into full ownership with effect from date of commencement of 1956 Act under section 14 of 1956 Act. If widow has claimed partition of her interest and her share in coparcenary property has been defined prior to commencement of 1956 Act and she is in possession of said share on date of commencement of 1956 Act, she becomes full owner of property falling to her share with effect from date of commencement of 1956 Act. If widow has not claimed partition prior to commencement of 1956 Act, she becomes full owner of undefined interest of her husband in joint family property which has devolved on her under section 3(1) of Act of 1937. As result of conferment of right of full ownership in respect of Hindu women's estate which devolved on her under sections 3(2) and 3(3) of Act of 1937, Hindu widow acquires unrestricted power of disposition and, after her death, it would devolve on her heirs. We have not been able to find any provision in 1956 Act which has effect of crystallising share of Hindu widow which had remained undefined on date of coming into force of 1956 Act on account of widow not having claimed partition of her share of joint family property and, therefore, it cannot be said that provisions of 1956 Act have effect of crystallising share of Hindu widow in joint family property which has devolved on her under sections 3(2) and 3(3) of Act of 1937 and making definite what was fluctuating on date of coming into force of 1956 Act. In present case, agreement dated October 21, 1957, shows that after death of Seth Vithal Das and till date of agreement dated October 21, 1957, only family jewellery was divided amongst members of family on or about April 9, 1952, and other properties of joint family, namely, businesses carried on by family as well as immovable properties continued to remain joint and by agreement dated October 21, 1957, arrangement was made whereunder businesses hithertofore carried on by family were divided between Seth Mukunddas and Seth Gokuldas but immovable properties belonging to joint family were not divided. This would show that till October 21, 1957, assessee had not claimed partition of her interest in joint family property and even under agreement dated October 21, 1957, only partial partition of some other properties, viz., businesses, was effected but immovable properties of joint family were not partitioned. In these circumstances, it is not possible to hold that interest of assessee in joint family properties which had devolved on her under provisions of sections 3(2) and 3(3) of Act of 1937 had been defined either on death of her husband Seth Vithal Das in 1951 or on date of coming into force 1956 Act and it cannot, therefore, be said that on date of execution of agreement dated October 21, 1957, assessee was absolute owner of defined share in joint family properties. Tribunal has found that in pursuance of provisions of Act of 1937, rights of assessee in properties of her husband were statutorily defined and unfluctuating and her interest was limited to life alone and that after coming into force of 1956 Act and in view of sections 4 and 14 of said Act, her limited interest in property was converted into absolute right. In our opinion, said finding recorded by Tribunal is not in consonance with law laid down by Supreme Court in Potti Lakshmi Perumallu v. Potti Krishnavenamma, AIR 1965 SC 825, Satrughan Isser v. Sabujpari, AIR 1967 SC 272 and CED v. Alladi Kuppuswamy [1977] 108 ITR 439, to which reference has already been made by us, wherein it has been held that interest of Hindu widow which devolves on her under sections 3(2) and 3(3) of Act of 1937 remains fluctuating till widow claims partition and only then it becomes fixed remains fluctuating till widow claims partition and only then it becomes fixed and definite. Although there is reference by Tribunal to decision of Supreme Court in Potti Lakshmi Perumallu v. Potti Krishnavenamma, AIR 1965 SC 825, Tribunal appears to have failed to take note of aforesaid principle laid down in said decision. In view of aforesaid discussion, we are of opinion that with reference to question No. 1, it must be held that on facts and circumstances of case and on correct reading and interpretation of agreement dated October 21, 1957, and partnership dated November 1, 1957, assessee was possessed of undefined interest of her husband, Seth Vithal Das, in joint family property on date of coming into force of 1956 Act and said undefined interest was property which was possessed by assessee within meaning of section 14 of 1956 Act. As regards question No. 2, we are of view that on correct interpretation of provisions of section 3(2) and (3) of Act of 1937, as amended by Act XI of 1938, and sections 4 and 14 of 1956 Act, Tribunal was not right in holding that on death of Seth Vithal Das, husband of assessee, in year 1951, share of assessee became fixed, i.e., 1/3rd of estate left by Seth Vithal Das and this one-third share was possessed by assessee on date of passing of 1956 Act on June 17, 1956, and that 1/3rd share became her absolute property. In our opinion, on date of passing of 1956 Act, assessee was possessed of undefined interest of her husband, Seth Vithal Das, in joint family property and after coming into force of 1956 Act, she became absolute owner of that undefined interest by virtue of section 14 of 1956 Act. With regard to question No. 5, we are of opinion that said question does not arise in view of our finding with regard to questions Nos. 1 and 2 that share possessed by assessee on date of coming into force of 1956 Act was undefined and fluctuating. We may now deal with questions Nos. 6 and 7. Question No. 6 is as to whether assessee, by giving up her share or interest in joint family property in favour of her two sons, transferred property within meaning of section 2(xxiv) of Act and thus made gift as defined by section 2(xii) of Act. said question involves interpretation of provisions of sections 2(xii) and 2(xxiv) of Act which may be reproduced as under: " 2. (xii)'gift' means transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes transfer or conversion of any property referred to in section 4, deemed to be gift under that section. " " 2. (xxiv)' transfer of property' means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting generality of foregoing, includes-- (a) creation of trust in property; (b) grant or creation of any lease, mortgage, charge, easement, license, power, partnership or interest in property; (c) exercise of power of appointment of property vested in any person, not owner of property, to determine its disposition in favour of any person other than donee of power; and (d) any transaction entered into by any person with intent thereby to diminish directly or indirectly value of his own property and to increase value of property of any other person. From perusal of section 2(xii) of Act, it is evident that in order that transaction may be gift under Act, there must be transfer by one person to another of any existing movable or immovable property and expression " transfer of property " is defined in section 2(xxiv). As to whether partition of assets of joint Hindu family constitutes transfer has come up for consideration before Supreme Court in number of cases. In CIT v. Keshavlal Lallubhai Patel [1965] 55 ITR 637, Supreme Court has held that partition of joint Hindu family property is not transfer in strict sense. In that case, Supreme Court has quoted with approval following observations from judgment of Madras High Court in Gutta Radhakristnayya v. Gutta Sarasamma, AIR 1951 Mad 213 (head note) (at page 641 of 55 ITR): " Partition is really process in and by which joint enjoyment is transformed into enjoyment in severalty. Each one of sharers had antecedent title and, therefore, no conveyance is involved in process as conferment of new title is not necessary. " In CGT v. N. S. Getti Chettiar [1971] 82 ITR 599, Supreme Court has considered provisions of sections 2(xii) and 2(xxiv) of Act for purpose of deciding as to whether partition in family could be considered as disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property within meaning of those words in section 2(xxiv) of Act. Supreme Court, placing reliance on its earlier judgment in CIT v. Keshavlal Lallubhai Patel [1965] 55 ITR 637, has held that partition in family does not effect any transfer as generally understood in law and that it could not be considered to be disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property within meaning of these words under section 2(xxiv) of Act and, therefore, it does not constitute gift under section 2(xii) of Act. In that case, learned judges have also observed that expression " transaction " referred to in clause (d) of section 2(xxiv) of Act takes its colour from main clause, namely, it must be transfer of property in some way and that said clause can have no application to partition of joint family property. In this context, learned judges have observed that member of Hindu undivided family who has no definite share in family property before division cannot be said to diminish directly or indirectly value of his property or to increase value of property of any other coparcener by agreeing to take share lesser than what he would have got if he had gone to enforce his claim, and that till partition his share in family property is undetermined and he becomes entitled to share in family property only after partition and, therefore, there is no question of his either diminishing directly or indirectly value of his own property or of increasing value of property of anyone else. same position was reiterated by Supreme Court in CED v. Kancharla Kesava Rao [1973] 89 ITR 261 (SC), wherein court was construing provisions of sections 7 and 24 of Estate Duty Act, 1953. We find that Tribunal has referred to case of CGT v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC) but has held that said decision would not be applicable to case of assessee because assessee is not coparcener in Hindu undivided family and her rights are governed under section 14 of 1956 Act. Tribunal, after referring to terms of agreement dated October 21, 1957, and partnership deed executed by Seth Mukunddas and Seth Gokuldas in November, 1957, has observed that assessee had definite and transferable share in property in question and she had full right of disposition of same and that assessee taking her share of Rs. 8,01,073,70 in property which was partitioned on October 24, 1957, transferred or abandoned or gave up same in favour of her sons. We have already considered this aspect of matter while dealing with questions Nos. 1, 2 and 5 and we have held that on date of execution of agreement dated October 21, 1957, share of assessee in joint family property had not crystallised and it was not defined and although assessee was not coparcener in Hindu undivided family, by virtue of provisions of sections 3(2) and 3(3) of Act of 1937, she stood in same position as her husband in coparcenary and interest of her husband that had devolved on her had remained undefined because assessee had not claimed partition of her said interest. We are, therefore, unable to agree with Tribunal that assessee had definite share in joint family property on date of execution of agreement dated October 21, 1957. Since share of assessee in joint family property was indeterminate, present case is fully governed by decision of Supreme Court in CGT v. N. S. Getti Chettiar [1971] 82 ITR 599 and it cannot be said that by executing agreement dated October 21, 1957, and by giving up her share or interest in businesses of joint family, petitioner had transferred any property to her sons within meaning of section 2(xxiv) of Act and had thus made gift as defined in section 2(xii) of Act. Tribunal was, in our opinion, not right in taking said view. Question No. 7 is as to whether act of assessee in executing agreement dated October 21, 1957, amounts to deemed gift within meaning of section 4(c) of Act. It turns on interpretation of section 4(c) of meaning of section 4(c) of Act. It turns on interpretation of section 4(c) of Act which reads as under: "4. Gifts to include certain transfers.--For purposes of this Act,-- (c) where there is release, discharge, surrender, forfeiture or abandonment of any debt, contract or other actionable claim or of any interest in property by any person, value of release, discharge, surrender, forfeiture or abandonment, to extent to which it has not been found to satisfaction of Gift-tax Officer to have been bona fide, shall be deemed to be gift made by person responsible for release, discharge, surrender, forfeiture or abandonment." In relation to aforesaid provision, Central Board of Revenue has issued circular dated February 27, 1959, to following effect: " Transfer deemed to be gifts: Section 4(c) has been inserted with object of roping in so-called business transactions which are really gifts in camouflaged form. It is not, however, intention to penalise cases where release, discharge, surrender, forfeiture or abandonment has been made for bona fide reasons. For example, debt may be abandoned because it is genuinely irrecoverable and person may not have taken legal steps to recover amount, as it would mean only throwing good money after bad. Such abandonment will not be treated as gift. This provision could be invoked only in cases where circumstances justify inference of collusion between person, who makes discharge, surrender or abandonment, etc., and person in whose favour discharge, surrender or abandonment, etc., has been made." Circular No. 1(1)59 GT dated February 27, 1959, issued by Central Board of Revenue, New Delhi. In present case, we find that by agreement dated October 21, 1957, only partial partition has been effected in respect of businesses hithertofore carried on by joint family and immovable properties of joint family were not partitioned. On basis of agreement dated October 21, 1957, it cannot, therefore, be said that assessee had released, discharged, surrendered or abandoned her interest in joint family property in favour of her two sons and question as to whether assessee has surrendered or abandoned her interest in joint family property can only be determined at stage when partition of remaining properties takes place. Moreover, circular of Central Board of Revenue, referred to above, shows that object underlying section 4(c) of Act is to rope in so-called business transactions which are really gifts in camouflaged form and said clause does not cover cases where release, discharge, surrender, forfeiture or abandonment has been made for bona fide reasons. In present case, Appellate Assistant Commissioner has observed that section 4(c) cannot apply to case of partition of joint family because transaction is bona fide and if partition is not genuine, then it will not be accepted by taxation authorities and that in present case partial partition effected by agreement dated October 21, 1957, has been accepted by Department as genuine. Tribunal, while dealing with this aspect of case, has held that agreement and partnership deed do not go to show that there was any bona fides in this transfer. Tribunal has also observed that fact that partial partition had been accepted by Department, by itself, would not go to prove that transaction in question was bona fide. In view of Tribunal, there should be some evidence to show that on account of definite reasons, assessee had given up her claim to extent of Rs. 8 lakhs odd which was her share in property in question and on this point there was no convincing evidence on record. aforesaid observations of Tribunal show that Tribunal has proceeded on basis that it was for assessee to establish bona fides of transactions and to adduce evidence in that regard. In our opinion, Tribunal was not right in proceeding on that basis. In order to bring case within ambit of section 4(c) of Act, it was necessary for Department to show that agreement dated October 21, 1957, was not bona fide and it should have placed material on record to show that it suffers from lack of bona fides. In present case, there is no material on record to show that agreement dated October 21, 1957, suffers from lack of bona fides or is not genuine. On other hand, we find that said agreement dated October 21, 1957, and partnership deed executed by Seth Mukunddas and Seth Gokuldas on November 1, 1957, in pursuance of agreement dated October 21, 1957, have been accepted as genuine by taxation authorities. In these circumstances, we are of opinion that Tribunal was not right in holding that provisions of section 4(c) were attracted to present case and act of assessee in entering into agreement dated October 21, 1957, amounts to deemed gift within meaning of section 4(c) of Act. answer to question No. 10 is dependent on answers to questions Nos. 1, 2, 5, 6 and 7. In view of findings recorded by us in relation to said questions, it must be field that assessee cannot be said to have made gift of property valued at Rs. 8,01,074 and same is not liable to gift-tax under Act. questions referred are, therefore, answered as under: Question No. 1: On facts and in circumstances of this case and on correct reading and interpretation of agreement dated October 21, 1957, and partnership deed dated November 1, 1957, Smt. Vidyawati Devi Rathi was possessed of undefined interest of her husband, Seth Vithal Das, in joint family property within meaning of section 14 of Hindu Succession Act, 1956. Question No. 2: On correct interpretation of provisions of section 3(2) and (3) of Hindu Women's Rights to Property Act, 1937 (XVIII of 1937), as amended by Act of 1938, and sections 4 and 14 of Hindu Succession Act, Tribunal was not right in holding that on death of Seth Vithal Das, husband of Smt. Vidyawati Devi Rathi, in year 1951, share of Smt. Vidyawati Devi Rathi became fixed, i.e., 1/3 of estate left by Seth Vithal Das and that one-third share was possessed by Smt. Vidyawati Devi Rathi on date of passing of Hindu Succession Act, i.e., June 17, 1956, and this one-third share became her absolute property. On date of passing of Hindu Succession Act, i.e., on June 17, 1956, Smt. Vidyawati Devi Rathi was possessed of undefined interest of her husband, Seth Vithal Das, in joint family property and after passing of Hindu Succession Act, she became absolute owner of that undefined interest. Question No. 3: Tribunal was right in holding that Smt. Gangabai, grandmother, was not entitled to any share either on death of Seth Vithal Das or on date of passing of Hindu Succession Act, 1956, and that she was only entitled to right of maintenance out of joint family property. Question No. 4: In view of answer to question No. 3, question No. 4 does not arise. Question No. 5: In view of answers to questions Nos. 1 and 2 that on date of coming into force of Hindu Succession Act, 1956, share of Smt. Vidyawati Devi Rathi was not definite and was fluctuating, this question does not arise. Question No. 6: On facts and in circumstances of case, Tribunal was not right in holding that assessee, by giving up her share or interest in joint family property in favour of her two sons, transferred property within meaning of section 2(xxiv) of Gift-tax Act, 1958, and thus made gift as defined by section 2(xii) of Act. Question No. 7: On facts and in circumstances of case, Tribunal was not right in giving finding in alternative, that act of assessee amounts to deemed gift within meaning of section 4(c) of Act. Question No. 8: On facts and in circumstances of case, Tribunal was right in holding that gift was liable to be assessed in assessment year 1958-59 and not in 1959-60. Question No. 9: On facts and in circumstances of case, Tribunal was right in holding that notice dated February 12, 1965, issued by Gift-tax Officer under section 16(1)(a) of Gift-tax Act, 1958, was within time. Question No. 10: On facts and in circumstances of case and also in view of provisions of Hindu law and Hindu Women's Rights to Property Act and Hindu Succession Act, Smt. Vidyawati Devi Rathi did not make gift of property valued at Rs. 8,01,074 and same is not liable to gift-tax under Gift-tax Act, 1958. parties are left to bear their own costs. *** SMT. VIDYAWATI DEVI RATHI v. COMMISSIONER OF GIFT -TAX