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5. There is no dispute before us that the gifts were in fact made. But the question is whether the gifts were void in the eye of law and the interest accruing on the aforesaid gifted amount did not accrue to the assessee for income-tax purposes.

6. It has been laid down by their Lordships of the Privy Council in Hanuman Kamat v. Hanuman Mandur, [1891] I.L.R. 19 Cal. 123 that the alienation by a manager of a joint Hindu family was not necessarily void but was only voidable if objections were taken to it by the other members of the joint Hindu family. The Division Bench of the Lahore High Court in Imperial Bank of India, Jullundur v. Mt. Maya Devi, A.I.R. 1935 Lah. 867 has pointed out that on this point there is no distinction between sales and mortgages on the one hand and gifts on the other. We may in this connection refer to the following observations:

7. This case has been relied on in Brahamdutt Bhargava's case, [1962] 46 I.T.R. 387. Learned counsel for the department has relied on A. Basaviah Gowder v. Commissioner of Gift-tax, [1963] 49 I.T.R. 817 and Smt. Valluri Janakamma v. Commissioner of Gift-tax, [1967] 66 I.T.R 255. Brahamdutt Bhargava's case is binding on us and we do not feel any necessity for referring the case to a larger Bench, specially for the reason that in our view whether the gifts are void or voidable, the interest accruing on the gifted amounts did not accrue to the assessee for the purpose of income-tax. We may, however, point out that the terms "void" and "voidable" are often confused, and distinction between these two is not properly recognised. In Pollock on Contracts, page 6 (twelfth edition), this distinction has been truly and correctly pointed out as follows :

8. It must also be kept in mind that whether the act is void or voidable, it is only persons having some rights in the property affected by that act who can come in a court of law to seek an appropriate relief by declaring the act void or voidable. Under a void gift there is no passing of title from the donor to the donee, while under a voidable gift, there is such passing of title, but that title is defeasible under certain circumstances under appropriate proceedings brought in by the person interested in the property which has been gifted. In the instant case, there is no question that the amount of Rs. 4,00,000 which was gifted has gone into the hands of the strangers and they had earned some income out of that amount of Rs. 4,00,000. Even if the gifts are treated as void, it is not the assessee who has earned any income out of the amount of Rs. 4,00,000. Under the Income-tax Act, tax is leviable under Section 3 on the total income of the previous year of every individual, Hindu undivided family, company and local authority and of every firm or other association of persons or the partners of the firm or the members of the association individually. Inclusive definition of "income" has been given in Section 2(6C) of the Act. The case before us does not fall within the inclusive definition of income. In the instant case, the entire sum of Rs. 4,00,000 had passed into the hands of other persons and they were earning income from that amount and not the assessee. It cannot be contended that the other persons who had earned the income from the amount of Rs. 4,00,000 were not liable to income-tax and the assessee who had not earned that income was liable to income-tax. The argument addressed to us is that if the gifts are void, then title to the amount of Rs. 4,00,000 remained vested in the assessee and, therefore, it was liable to pay income-tax. The Income-tax Act taxes the person whose income it is and not the person who may per chance have title to the property through which the income has been earned. If such an argument is accepted, a thief who had stolen an amount of rupees one lakh from a bank and had earned income therefrom would not be liable to pay income-tax on the income but the bank which had lost the amount of rupees one lakh would be liable to pay tax simply on the ground that the bank had title to the amount of rupees one lakh. Such are not the provisions of the Indian Income-tax Act. Learned counsel for the department has pointed out Section 16(3)(c) of the Act, but that section applies to altogether different situations. Lord Macmillan in Chamberlain v. Commissioners of Inland Revenue, [1943] 25 T.C. 317, 329 (H.L.), has clarified this position in the following observation :

14. Our answer to the question, therefore, is that the amount of rupees four lakhs together with the estimated interest thereon ceased to be an asset of the assessee for wealth-tax purposes whether the gifts were void or voidable and that amount could not be taxed under the Wealth-tax Act.

15. Both the references are answered accordingly. We pass no order as to costs in both the references.