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TMI Blog1988 (6) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Gift-tax officer that the assessee had gifted to his son, Shri Rajesh Sethi, the assessee's rights as sub-lessee of a residential plot of land bearing No. 380, in Block B, New Friends Co-operative house building Society,New Delhi, measuring 492 sq. yds. It was also contended that since as per terms of the sub lease deed the assessee's rights in the said plot were absolutely restrictive and there was a total ban on transfer to a non member of the society the value of a gift may be taken at the face value, i.e., actual investment made in the said plot with the co-operative society amounting to Rs. 22,624. Reliance before the learned Gift-tax Officer, appears to have also been placed on the ratio in the case of CWT v. Smt. Promila Bali [1983] 141 ITR 942 [Delhi]. The learned Gift-tax officer after allowing the statutory deduction of Rs. 5,000 took the value of the taxable gift at Rs. 4,87,000 with the following observations. "Assessee has no doubt quoted the case of Smt. Promila Bali in defence of his claim but as per recent instructions of the department, the decision is not being contested further by way of SLP because of law tax effect. In other words, the department has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's first two grounds are against that finding of the learned Commissioner of Gift-tax [Appeals]. Before us, Shri S. K. Chadha the learned authorised representative, repeated the submissions earlier made before the learned lower authorities and also invited attention to the copy of the perpetual sub lease placed at pages 36 to 46 of the paper book. The mention was also made of the ratio in the case. According to Shri Chadha, the value of the gift should be the price the assessee paid for acquiring the property gifted. It was also argued that the rate confirmed by the learned Commissioner of Gift-tax [Appeals] was excessive. The mention was also made at pages 3 and 4 of the paper book mentioning certain comparable sales. 5. On behalf of the Revenue, Shri N. B. Singh, the learned Departmental Representative, supported the order appealed against. 6. Submissions have been and considered. Copy of sub-leasedeed has been carefully examined. In terms of clause 6 of the same indicates that there were certain restrictions on transfer, i.e. certain conditions were to be satisfied before the transfer could take place. Further condition is that in case the consent is given by the Delhi A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed in terms of section 18A of the Gift-tax act. On this issue there is not much of discussion in the orders of the authorities below. However, it is seen that through this ground the assessee is talking about the credit for stamp duty paid on instrument of gift-deed. The learned Gift tax officer in this respect may ascertain from the record including the copy of the gift deed as to by whom such expenditure was incurred. In case it was not incurred by the assessee, the claim would appear to be without any basis. 10. No other ground was raised before us. The Paper book has been perused. In the result, the appeal is allowed in part. AS PER BENCH As it has not been possible for us to come to an agreed conclusion with regard to ground Nos. 1 to 3 we refer the following question for the opinion of the Third Member in terms of Section 255[4] of the Income-tax Act,.1961 : "On the facts and in the circumstances of the present case, what should be the value of the plot of land bearing No. 380 in Block B, New Friends Colony, measuring 492 sq. yds. given to the assessee on perpetual sub-lease by the Coop, Society named as New Friends Coop. Housing Building Society Ltd. - whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer. On that basis some relief was given to the assessee. Dissatisfied still with the order of the Commissioner (A), the assessee filed a further appeal before the Tribunal and repeated the contentions again. 3. The learned Judicial Member held that under the terms of the sub lease deed there was not total ban on the transfer of the land. Therefore the ratio in the case of Smt. Promila Bali would not be applicable as that case proceeded on the basis that there was a total ban on transfer. He further held that the amount paid by way of contribution to acquire the leasehold rights could not be determinative of the cost of land at the time of making of the gift. The Commissioner (A) had taken the circular issued by the Government of India to determine the market rates for the purpose of determining the unearned increase and the value fixed by the Commissioner (A) being in conformity with the values adopted by the Government in that circular, the assessee was not entitled to any relief. The learned Accountant Member, however, held in every brief order written in Hindi that the facts of the case were identical to the facts obtaining in the case of Smt. Promila Bali As a consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined the correctness of the decision in the case of Smt. Promila Bali, In dealing with this aspect the Delhi High Court observed as under : "As far as the first question is concerned, it was held by the Tribunal in Miss Beneeta Seth's case that the property was not freely salable in the open market as it was a plot allotted to a member of Chiraj Co-operative House Building Society Ltd. The property was valued at the amount of contributions made to the society towards the plot as there was a total bar on transfer to a non-member of the society. The Tribunal accepted the view that the plot was not transferable and, therefore, its value could be determined, according to the contributions made to the society." This shows that the decision of the Tribunal in the case of Miss Beneeta Seth was held to be correctly decided by the High Court and that principle was correctly applied to the case of Smt. Promila Bali and that the case of Smt. Promila Bali was also rightly decided by the Tribunal. The High court held in this case that the question be referred to it for its opinion was essentially a question of fact and not a question of law. While deciding this issue the High court fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be entitled to refuse in his absolute discretion : PROVIDED that, in the event of the consent being given, the lessor may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover a portion of the unearned increase in the value (i.e., the difference between the premium paid and the market value) of the residential plot at the time of sale, transfer, assignment, or parting with the possession, the amount to be recovered being fifty per cent of the unearned increase and the decision of the Lessor in respect of the market value shall be final and binding : PROVIDED FURTHER that the Lessor shall have the per-emptive right to purchase the property after deducting fifty per cent of the unearned increase as aforesaid." The terms of this lease deed are identical to the terms obtaining in the cases of Smt. Promila Bali as well as Miss Beneeta Seth. In fact all the sub-lease-deeds are executed on forms prescribed by the Government and there is no difference at all. It was considering a like clause in these, lease deeds, the Tribunal held that the assessee acquired a right to be allotted a plot subject to the serious restrictive conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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