2010 (7) TMI 295 - HC - Income Tax

Transfer of property to a wife - but did not pay gift tax - on the ground that this gift had been made by way of family arrangement - reason given by the assessee was that he had divorced his first wife from whom he had one son - To remove the insecurity of his second wife, he had gifted the house to his second wife since he did not plan to have any child from the second marriage - Held that - this is a bonafide family arrangement - appeal is accordingly dismissed

Summary

The High Court of Himachal Pradesh dismissed the revenue's appeal regarding the transfer of property to a wife as a family arrangement, not subject to gift tax under the Gift Tax Act, 1958. The court found it to be a bonafide family arrangement, stating that it is a question of fact, not law. The appeal was dismissed with no costs.