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TMI Blog1986 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2-1-1980 an agreement to refer to an arbitration was entered into between Shri Rangadas and his daughters. The daughters filed their claim before the Arbitrator Sri Narasimha Rao on 12-2-1980. The assessee filed his claim on 18-2-1980. Thereupon, the Arbitrator Sri Narasimha Rao gave an award on 28-8-1990. In the award he directed the assessee to transfer the property (Raj Mohalla property) for education of his grand-children and ultimately the award was filed into the Court on 31-3-1980 with a request that it may be made into a rule of the Court. The Court of Fifth Additional Judge, City Civil Court, passed the decree in terms of the award on 23-4-1980. The learned 5th Additional Judge also recognised that as per award it was decreed that the Raj Mohalla property is awarded to the five daughters to Sri Rangadas who shall hold it jointly and the income from rents and profits of this property shall be utilised for their education and welfare. The learned Judge also recognised the right of Sri Rangadas to have any construction put on the terrace of the first floor upon which the right, title and interest exclusively belonged to Sri Rangadas. 3. In pursuance of the award passed, g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore any property moveable or immoveable, given to her for or at the time of marriage cannot be termed as a 'gift' within the meaning of section 122, T. P. Act as the essential ingredients of gift are conspicuous by their absence in this transaction of giving the property to the daughter by way of 'Pasupukumkuma' which is both involuntary as well as for consideration. Once the said transaction is taken out of the ambit of section 122 of T. P. Act, it is not at all obligatory that the said document, if it is in writing, requires any registration within the meaning of section 123, T. P. Act and under section 17 of the Registration Act. In fact, it is quite apparent that the transaction of giving away the property by was of 'pasupukumkuma' could very well be done orally and if any instrument in writing has been brought into existence, the same does not require any registration as the said instrument can be used for the proof of transaction by way of evidence. There is yet another angle: The unregistered instrument can be used for the purpose of section 53A, T. P. Act as proof of part performance. In this case, admittedly, possession has been given to daughters and in order to attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dren of the assessee and he concluded that the so-called dispute between the father and the daughters, the reference of the dispute to the Arbitrator were all created and the award which was later on decreed by the Court does not confer a valid title or ownership of the property in the daughters of the assessee. The claim that it is a family arrangement cannot be considered as the so-called dispute is only contrived one and as children had no antecedent title to the property. Ultimately, he held that there was no valid and effective transfer of title and ownership of Raj Mohalla property from the assessee to his children. 6. For assessment year 1983-84 additionally it may be said that the assessee did not include even the 2/5th share of his minor daughters in his net wealth. On 2-1-1980 Kum. Umamaheswari, Kum. Sharada and Kum. Brahmaramba were aged 17, 15 and 11 years respectively. He concluded that by 31-3-1983 Kum. Brahmaramba should still be a minor even if the assessee's stand is taken to be wholly correct. There is no justification to exclude the whole value of Raj Mohalla property from the net wealth of the assessee. At least the minors' share is includible in the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt. On a reference at the instance of the Controller of Estate Duty: Held, that the words 'belonging to' in the section 33(1) of the Estate Duty Act, though, no doubt, they denote absolute ownership, signify even possession of an interest less than that of full ownership, if the context so requires. Under section 2(15) of the Estate Duty Act, any interest in the property itself is property. Thus, the word 'property' in section 3(1)(n) of the Estate Duty Act, read with section 2(15) includes not only the properties wherein the deceased possessed absolute ownership in the corpus of any property, but also any interest in the property. Hence, the house property in which the deceased had a life interest and in which he resided at the time of his death is not liable to be included in the estate of the deceased for estate duty." 9. It is contended by Shri Dastur that if an award which is not registered is filed into the Court and a decree is invited then the Court may or may not pass a decree. Once a decree is passed then the decree operates from the date of the award and it become fully efficacious. On the strength of the Madhya Pradesh High Court decision in Moolchand's case , pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air reading of the above portion of the award which was later translated into the order of the court clearly reveals that the property belongs to the daughters as tenants-in-common and they are also entitled to the income therefore for their education and welfare. So we do not agree with the learned Commissioner that they are entitled only to the income derived from the property but not to the property itself. As they are tenants-in-common, we are of the opinion that the assessee is correct in including 2/5th Share of Raj Mohalla property in his net wealth for assessment year 1982-83 as much undivided share of the property only belongs to the minor daughters of the assessee. So also, for assessment year 1983-84 the assessee ought to have shown at least 1/5th of the property as part of his net wealth as by 31-3-1983 at least his last daughter would remain a minor. However, this was not done and no part of Raj Mohalla property was included in the assessee's net wealth and no reason was also assigned as to why it was not included. 10. The learned departmental representative, on the other hand invited our attention to pages 10, 28 and 29 of paper book No. 1. At page 10 part of the aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 4(7) as follows: "(7) the expression 'irrevocable transfer' includes a transfer of assets which, by the terms of the instrument effecting it, is not revocable for a period exceeding six years or during the life time of the transferee, and under which the transferor derives no direct or indirect benefit, but does not include a transfer of assets it such instrument (i) (ii) in any way gives the transferor a right to resume power, directly or indirectly, over the whole or any part of the assets or income therefrom;" It is the case of the revenue that because the stair-case as well as the garage can be commonly used even by Sri Rangadas as a common passage in case he constructs further stairs over the upstairs then it should be deemed to be an asset and it should be included in his net wealth. In our opinion, this contingency does not arise for these two assessment years under consideration and so we need not consider this aspect of the matter in these appeals. 11. The main contention which has to be tested is whether the award dated 28-3-1980 giving Raj Mohalla property to all the five daughters of the assessee requires registration as it contemplated transfer of immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing received in evidence and acted upon by the court. On the strength of the said decision it is argued that the award now before us creates rights in favour of all the five daughters in immovable properties of the value of more than Rs. 100 each and therefore it should have been qualified under section 17 and 49 of the Registration Act for being received in evidence and it should be eligible to be acted upon by the court before any decree is passed on the strength of such award. In the case before us the award is admittedly an unregistered one and therefore the award is not receivable into court and is not entitled to be acted upon and a valid decree cannot be founded upon it and cannot be passed in pursuance thereof under section 17 of the Arbitration Act. When a document cannot be looked into and cannot be acted upon is still acted upon contrary to the provisions of law any decree passed on the strength of such document would be a nullity. A decree would not only be merely irregular but would become illegal per se. In support of the said contention we came across a later decision of the Andhra Pradesh High Court in Ariyar Mohammad Habeebur Rahman v. Ansuri Varamma AIR 1974 AP 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the award only Raj Mohalla building was dealt with. In the revised voluntary return filed for gift-tax purposes the value of Raj Mohalla property was shown at Rs. 5 lakhs. Two fifth share in Raj Mohalla property was returned at Rs. 1,18,000 for wealth-tax purposes by this very assessee for assessment year 1982-83. Therefore, these will conclusively prove that the value of the share of each of the daughters in Raj Mohalla property would be certainly more than Rs. 100 and therefore, we hold that in view of the above authorities that the award is clearly registrable under section 17(1) (b) of the Registration Act and unless it is registered it cannot be looked into and neither a decree nor a rule of a court can be passed on the strength of the award dated 28-3-1980. Further as we have already stated that though 2/5th value of the Raj Mohalla property was never returned as part of the net wealth of the assessee for assessment year 1983-84 and though no reason was assigned for not including any part of it the Wealth-tax Officer accepted the returned wealth for assessment year 1983-84 which, in our opinion is clearly erroneous and prejudicial to the interests of the revenue. 13. Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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