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TMI Blog1993 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... uted a release deed dt. 20th June, 1987, relinquishing their rights in the immovable properties in favour of their father B.V. Kameswara Rao, after receiving a total consideration of Rs. 1 lakh from the latter. Thus, in effect the daughter and son each received a sum of Rs. 50,000 and relinquished their joint 2/3rd share in the immovable properties left by their mother in favour of their father. The Assessing Officer by invoking the provisions of s. 4(1)(a) of the GT Act held that the value of the 1/3rd share was Rs. 3,38,475, that the son after receiving Rs. 50,000 from his father relinquished his 1/3rd share in favour of his father and that the difference of Rs. 2,88,475 constituted the gift to father. Likewise, he held that the difference of Rs. 2,88,475 being the difference between the value of the 1/3rd share and the consideration of Rs. 50,000 constituted the gift by the daughter to their father. Accordingly, the Assessing Officer took the value of the gift in each case at Rs. 2,88,475 and assessed it to gift-tax after allowing the basic exemption. Aggrieved by it, both the assessee, i.e., the daughter and the son of the alleged donee preferred appeals before the first appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft or deemed gift. 4. The learned Departmental Representative while refuting the submissions made on behalf of the appellants contended that the transaction in question falls under s. 4(1)(a) of the GT Act and, hence, we need not go into the bona fides of the transaction, that it is a case where only the question of adequacy of consideration has to be gone into and nothing else and that even a release deed in respect of immovable property amounts to transfer of property and that the assessments have been rightly made. 5. We have duly considered the rival submissions. Admittedly, one B.V. Subbayamma owner of the two buildings in question died intestate on 6th Dec., 1986 leaving behind her husband, her daughter and her adopted son. Those three persons each became entitled to an undivided 1/3rd share in the property left by Smt. B.V. Subbayamma who died on 6th Dec., 1986. There is no dispute regarding the fair market value of the said property. Its value was taken at Rs. 8,25,000. Admittedly, on 20th June, 1987, both the appellants executed a registered document relinquishing their joint 2/3rd share in the immovable property in question in favour of their father for a consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender of properties constitutes a deemed gift attracting s. 4(1)(c) of the GT Act and the same was upheld by the Commissioner(A). The Delhi Bench of the Tribunal held that the assessee therein bona fidely abandoned his share in the properties in order to avoid disputes and misunderstandings add that it was a case of a bona fide and genuine family settlement with a view to keep family harmony and maintain peace amongst family members, and that no element of gift was involved in it. In the case of Trustees of Mt. Mapean Trust vs. First GTO (1987) 20 ITD 365 (Bom) the assessee-trust offered some of its properties for sale for a consideration of Rs. 8 lakhs. Accepting the said offer Shri V.K. Dubash purchased the said property for Rs. 8 lakhs. According to the GTO the value of the said property was about Rs. 76 lakhs. Hence, he brought the difference between the sale price and market price to tax by treating the same as deemed gift under s. 4(1)(a) and the same was upheld by the Commissioner(A). The Tribunal, Bombay Bench 'A' held that the purchaser had been conferred the right to purchase the property by virtue of the trust-deed, that the market value even if it was higher than the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as otherwise than for adequate consideration the AAC was Justified in holding that there was no deemed gift under s. 4(1)(a) for which an assessment could be made." In the case on hand, each of the two appellants owns an undivided 1/3rd share in each of the two house properties. Each of these house properties cannot be divided into three portions and enjoyed conveniently. That was the reason why the appellant and their father at the instance of the well-wishers of their family thought it fit to bring into existence the relinquishment deed in question by way of a family settlement with a view to maintain peace and harmony in the family and to avoid possible disputes and rival claims in future. 8. In Ziauddin Ahmed vs. CGT 1976 CTR (Gau) 161 : (1976) 102 ITR 253 (Gau), the Gauhati High Court held that a family settlement entered into by the parties who were members of a family, bona fide to put an end to disputes among themselves is not a transfer, and that Courts give effect to a family settlement upon the broad and general ground that the object is to settle existing or future disputes regarding property amongst members of a family. In that case, a father transferred some share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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