9911796707
TMI Blog1989 (4) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... g with her two children, namely, Md. Bakhtiar Ali Ahmad and Saira Banu Begum, purchased a plot of land on which the present building stands, and as such the assessee's share was 1/3rd in the land and the building. The I.T.O. mentioned that this was found to be incorrect. The I.T.O. went on to say that for the assessment year 1985-86, the assessee claimed to be the owner of 1/5th share. The other four co-owners were Saira Banu Begum, M.D. Bakthiar Ali Ahmad, Abeda Begum and Aftab Ali Ahmad. Before the I.T.O., the assessee claimed that there was a family settlement agreement which was effected on 9-7-76 duly signed by all the brothers and sisters including the husband of the assessee. It was pointed out that there was a land of 2 K 13 lechas at Dispur on which the building stands and that the land was exclusively given to the assessee in her exchange of her 19 bighas 1 K 17 lechas of land being agricultural land at village Bihadia. It was stated that this Bihadia Village land was the marriage dower of the assessee known as Meher. The assessee is a Mohammedan. The husband of the assessee Shri Bahar Ali was also a signatory to the family settlement. According to the I.T.O. Meher is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion went up to the year under consideration. Various points were dealt with by him in the assessment order. The I.T.O. did not accept the contention of the assessee that certain investments were made by using materials purchased on credits. But in the absence of supporting evidence, the I.T.O. did not give credit for such things. He also found that the drawings were not made by the assessee during the year. On this point also, Rs. 6,000 addition was made. The total income was computed at Rs. 7,34,840. 5. The assessee took up the matter before the C.I.T.(Appeals) and filed written submissions. The claim made before the I.T.O. was reiterated before the C.I.T. (Appeals) as well. In addition, it was submitted that the construction was not started or completed during the assessment year in question, but the construction spread over for a number of years and went on to the years subsequent to the year under appeal. It is seen that the assessee also claimed contractor's profits at 10% as deduction since the construction was made under own supervision. The C.I.T.(Appeals) dealt with various points made out by the I.T.O. as well as by the assessee and came to the conclusion that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty are also the heirs and in that capacity the sons and daughters have distinct and congent right to that property as heirs. 7. It is also submitted that it is well settled that a compromise on family arrangement is based on the assumption that there is a antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is. It is also submitted that it is well settled that the court will lean towards upholding the family settlement and it is intended to bring about family peace and to avoid future disputes which may ruin the family. The assessee's learned counsel placed much reliance on the decisions as Kisto Chandra Mandal v. Mt. Anila Bala Dasi AIR 1968 Pat. 487, Mt. Kauleshwari Kuer v. Surajnath Rai AIR 1957 Pat. 456, Radhakishan Laxminarayan Toshniwal v. Shridhar Ramchandra Alshi AIR 1960 SC 1368 and it is urged at length that the case of the assessee has been wrongly rejected by the authorities below and, therefore, the appeals by the assessee on different points as raised in the grounds of appeal may be accepted. 8. We have heard both the sides and we have gone through the orders of the authorities below for our consideration along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about harmony in the family and to do justice to the various members and, avoid, in anticipation, future disputes. It was further observed that in the case of a family arrangement, it is not necessary that there should have been previous dispute as to the rights of the parties. The term 'family' in the context of family arrangement is to be understood in a narrower sense of being a group of persons who are recognized in law as having a right of succession or having a claim of share in the property in dispute. At page 311, Mulla observed that family arrangement or family settlement, generally makes with approval of the court which always leans in favour of a transaction which ensures peace and goodwill among the family members and that this does not rest on any special rule of Hindu law but flows from general principles and policy of law. It was observed that though conflict of legal claims "in praesenti" or "in futuro" is generally regarded as a condition for the validity of the arrangement, it is not necessarily so and that even bona fide dispute, present or possible, which may not involve future claims will suffice. It was pointed out that such transaction brought about by the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gst other things, it was held that the court should lean strongly in favour of the family arrangement to bring about the harmony in the family and to do justice to the members and avoid, in anticipation of future disputes which might ruin them all. The decision in the case of Maturi Pullaiah was also considered. The same view was reiterated by the Hon'ble Supreme Court in the case of Kale. 12. In the present case, the assessee lady admittedly was in possession of meher property which she exchanged for the property at Ganeshguri, as mentioned on which a multi-storeyed building was to be raised. In other words, the assessee had dominion absolutely and without any restriction, as pointed out by the I.T.O. In the case of Nawazish Ali Khan [1948] APC 134, the Judicial Committee while recognising the peculiarities in the Muslim Law in the matter of creation of life estate and a reminder, expressed the view that Muslim Law does recognise and insist upon a distinction between the corpus of the property itself and the usufruct in the property. Over the corpus of property, the law recognises only absolute dominion, heritable and unrestricted in point of time; and where a gift of the corpus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the subject of the gift must be actually in existence at the time of the settlement. But this view was noted in Ameer Ali's Muhammedan Law, Vol. 1, page 75, wherein it has been observed that in the decision of the Hon'ble Bombay High Court the real principle seem to have been missed under which a gift of something not in existence at the time is not invalid. In the case of Mohd. Mustafa v. CGT [1970] 76 ITR 205, the Hon'ble Allahabad High Court dealt with the facts of that case regarding gift of money by Mohammedan, to his sons by book entries. It was contended that there can be no gift, under the Mohammedan Law unless there is delivery of the property gifted as there has been no actual delivery, there was no valid gift in the eye of Mohammedan Law. This stand was not accepted as section 3 of the Gift-tax Act charges a tax in respect of the gift, in that Allahabad case, the Tribunal held that on a correct appreciation of the Mohammedan Law there was a valid gift by the assessee in favour of the sons. Alternatively, the Tribunal expressed the view that even if the Mohammedan required delivery of the property no such requirement arose considering a gift under the Gift-tax Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court, if such custom is opposed to law and public policy the same is not a valid custom. In the circumstances, we are of the opinion that in the present case before us, the law of the land and the principles enunciated by the Hon'ble Supreme Court in various cases mentioned earlier, should prevail. 15. In the case of CGT v. Pappathi Anni [1981] 127 ITR 655, the Hon'ble Madras High Court has dealt with the similar situation. On the facts of that case at page 658, it was observed that it was not in dispute that if there is a partition there would be no occasion of any gift and that it is equally not in dispute that if the son had no antecedent right to the property then there would be a gift in favour of the son by the assessee in that case. It was also observed that it was not also in dispute that when there was a genuine family arrangement, then to the extent of the son giving up his claim in favour of the mother there would be a transfer for consideration and there could be no gift. 16. As pointed out by the I.T.O., the assessee obtained certain properties in the village on account of meher which she was entitled to receive from the husband in consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y takes his specified share. Of course, it is seen that there is a stipulation that the parties concerned are liable to repay debts to the creditors from whom money was borrowed for the construction etc. But that is a different consideration altogether. Thus, by making this family arrangement, the assessee and other family members are simply adjusting their respective shares in the property and in such a situation it cannot be said by any stretch of imagination that there was a transfer by the assessee to the children without any consideration, in view of the circumstances of the case narrated in the preceding paragraphs. The I.T.O. has pointed out that the children have got their properties allotted to them mutated in their favour in the records of the Gauhati Municipality authorities and they have been paying the tax etc. individually. According to the I.T.O. this was a mere pretence. In our opinion, it is not so. The children to whom, the shares have been specifically allotted took action for mutation as a corollary to the said family arrangement. The Assessing Officer has also pointed out that the lady herself took a loan from the Central Bank of India for substantial amount. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact, it continued beyond the year under consideration as well. It is, therefore, urged before us that the entire cost of construction cannot be considered as investment made by the assessee during the year under consideration. It is also the appeal by the assessee that advance rent was received from Government as well as from other parties, which were utilised in the construction, but such credit was not given by the authorities below in the computation of the investment amount. It is also the appeal by the assessee that various building materials were obtained from different parties on credit, but the authorities below have taken such investment to have been made in cash by the assessee out of the alleged undisclosed source of income. The assessing authorities did not accept the contention of the assessee to some extent in the absence of supporting materials, like credit bills and other details. It appears to us that the matter has been processed and finalised without proper appreciation of the facts and without considering those relevant points which should have been taken or verified by the Assessing Officer at assessment stage. It is required to be ascertained the period o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
