9911796707
TMI Blog1981 (6) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... as part of the Kalyanamandapam. It appears that there was dispute about the actual outlay on the building and it was finally arrived at an agreed figure of Rs. 1.8 lakhs for purposes of income-tax assessments. The income from this property was, as a result of a settlement under Voluntary Disclosure Scheme, adopted at Rs. 24,000 per annum. The assessee had let out that part of the property excluding the shops to M/s. Vasudevan & Co., a firm consisting of his three sons and son-in-law by a lease deed dt. 5th Nov., 1970 for a monthly rent of Rs. 300. For gift-tax purposes the GTO took the view that the difference between Rs. 24,000 arrived as property income in assessee's hands for income-tax purposes and that the rent received from M/s. Vasud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the self same property. The difference between the amount charged and such value ultimately admitted at Rs. 24,000 per annum in respect of the self same property. The difference between the amount charged and such value, in his opinion, was a concession which squarely get caught under s. 4(1)(a). The ld. Counsel, on the other hand, contended that there was no concession at all. He pointed out that the assessee was getting little more than Rs. 7,000 from the shops as well as from M/s. Vasudevan & Co., for the entire property. Leasing out the Kalyanamandapam part of the building after excluding the shops at Rs. 300 per month, he contended was not a concession. He filed the statement of account of M/s. Vasudevan & Co. and the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value thereof would constitute gift under the GT law, it can, as contended in the additional grounds, be considered only on 15th Nov., 1970 and again 15th Nov., 1973. The taxable events, if any, have occurred on these dates. The assessments for 1972-73, 1973-74 and 1975-76 as made cannot stand for the simple reason that there has been no taxable event in respect of the lease during the three years. As for an asst. yr. 1971-72 and asst. yr. 1974-75, we have to consider whether the lease agreement implies any concession constituting inadequate consideration within the meaning of s. 4(1)(a) of the GT Act. We are of the view that s. 4(1)(a) does contemplate transfers of property for inadequate consideration. A lease for a period of three years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the property from year to year, the fact that the assessee has let out to his close relatives and has agreed for a much larger value for income-tax purposes, though on rental basis, we fix the rent of the position let out to M/s. Vasudevan & Co. at Rs. 6,000. This will mean that the annual concession was about Rs. 2,400 per annum. The gross value for all the three years as on the date of agreement 15th Nov., 1970 can therefore be taken as Rs. 7,200. The assessment made by the GTO for this year at Rs. 7,600 is not for off the mark though he considered this part of the year only and not for the three years as ought to be done. We would therefore restore the gift-tax assessment for asst. yr. 1971-72 fixing the gift value at Rs. 7,600. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the rent for the next three years could be adopted at Rs. 12,500. Since the amount taken in the assessment for this year is Rs. 17,040, the assessee is eligible for relief of Rs. 4,540. The assessment for asst. yr. 1975-76 will have to be annulled because there is no taxable event during the year as the only item considered is the alleged concession in respect of the renewal already made and considered during the immediately preceding year.
4. In the result, the appeals for asst. yrs. 1972-73 to 1975-76 are dismissed. The departmental appeal is allowed and the order of the GTO is restored for asst. yr. 1971-72. The departmental appeal is partly allowed for asst. yr. 1974-75 and the relief due on the value of the gift is Rs. 4,540. X X X X Extracts X X X X X X X X Extracts X X X X
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