1991 (8) TMI 51 - HC - Income Tax

Summary

Issues:
1. Prematurity of writ petitions challenging valuation of properties transferred for lesser consideration on grounds of natural love and affection.
2. Applicability of Section 269Q of Chapter XX-A of the Income-tax Act to transfers made to relatives for lesser consideration.
3. Interpretation of the provisions of Chapter XX-A in relation to transfers made prior to September 30, 1986.

Analysis:

1. The judgment dealt with two writ petitions challenging the valuation of properties transferred for lesser consideration on grounds of natural love and affection. The respondents contended that the writ petitions were premature and should be raised before the proper forum for redressal. However, the court held that the petitions were not premature and proceeded to analyze the legal aspects of the case.

2. The court examined the applicability of Section 269Q of Chapter XX-A of the Income-tax Act to transfers made to relatives for lesser consideration. Section 269Q exempted transfers to relatives on account of natural love and affection from the provisions of the chapter. The court emphasized that the determination of whether a transfer was made to a relative and based on natural love and affection should be based on the contents of the sale deed. In this case, the sale deeds clearly indicated that the properties were transferred to the grandson out of natural love and affection, making Section 269Q applicable.

3. The judgment also discussed the interpretation of the provisions of Chapter XX-A in relation to transfers made prior to September 30, 1986. It highlighted that transfers made after this date were governed by Chapter XX-C of the Income-tax Act. However, since the transfers in question were executed before September 30, 1986, they fell under the purview of Chapter XX-A. The court concluded that the writ petitions challenging the valuation of the properties deserved to be allowed, and the order of reference by the Competent Authority for valuation was quashed.

In conclusion, the court allowed both writ petitions, quashing the order of reference for valuation and the consequential notices issued by the Valuation Officer. The judgment clarified the applicability of Section 269Q of Chapter XX-A to transfers made to relatives for lesser consideration and emphasized the importance of the contents of the sale deed in determining the nature of the transfer.