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TMI Blog1985 (1) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... on of providing some properties to the 4th and 5th sons, namely Velayutham and Kaliappan, a family arrangement was entered into on 30th March, 1979 amongst the father and the 5 sons by which the first three sons have agreed to give Rs. 1 lakh each to the 4th and the 5th sons in addition to certain foreign agricultural assets allotted to them. The assessee herein, O. S. T. S. Swaminathan and O. S. T. C. Chinniah were representing their respective HUF s. In response to notice under s. 13(2), the assessee have filed returns admitting NIL as total of taxable gift made. According to the GTO the assessee have given away part of their properties by way of reopening of original partition deed to their brothers S. Shri Velayutham and Kaliappan. In so far as the property allotted to Shri Velayutham is concerned, the GTO accepted that re-opening of the original partition and allotting certain shares to the said Velayutham will not come under the purview of the GT Act because the said Velayutham was in his mother s womb at the time where the original partition took place on 4th Jan., 1951. But, however in the case of properties allotted to Kaliappan are concerned, the GTO was of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id partition have taken undue advantage and the partition could be reopened and legitimate shares could be allotted to the various coparceners. Therefore, it was submitted that the family arrangement was made to avoid further disputes and litigations amongst the members of the family and, therefore, there is no element of gift in the transaction. We have also heard the ld. Departmental Representative who supported he order of the AAC. 4. We have already set out the facts in detail. At the time when a partition was effected on 4th Jan., 1951 Thenappa Chettiar had 3 sons, namely S/Shri Meyyappan, Swaminathan and Chinniah. On that date Velayutham was in his mother s womb. The last son Kaliappan was born after the said partition on 4th Jan., 1951, S/Shri Velaputham and Kaliappan were all along contending that the other members of the bigger HUF obtained an unfair advantage in the partial partition effected on 4th Jan., 1951 and the said partition was a fraud committed on the father Thenappa Chettiar and hence the said partition has to be re-opened. Hence on this ground there was constant in-fighting between the sons and their father Shri Thenappa Chettiar. The good relationship that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected on 4th Jan., 1951 to parties 5 and 6 as per the Schedule noted below: S. No. Name of Party Grand No. Area To whom given 1. O.S.T.M. Meyyappan 54142 5-399-44 O.S.T. Velayutham . . 54140 5-213-00 . . " " 54139 5-366-00 O.S.T. Kaliappan . . 54141 5-255-00 . 2. O.S.T.S. Swaminathan 55281 12-096-60 O.S.T. Velayutham . " " 55283 10-028-60 . . . 55284 2-078-20 O.S.T. Kaliappan 3. O.S.T.C. Chinniah 50771 13-185-48 O.S.T. Velayutham . " " 1870 11-453-00 O.S.T. Kaliappan Parties 2, 3, 4 shall each given Rs. 1,00,000 to each of the parties 5 and 6 as cash. The said payment of cash shall be made by the parties 2, 3 4 to parties 5 6 within 3 years (three years). In the event of failure to pay the said amounts within stipulated time, parties 2 to 4 shall pay the respective amounts with interest at 3 per cent per annum from 1st April, 1982." 6. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily. The word family in this context is not to be understood in a narrow sense but as being a group of persons who are recognised in law as having a right of succession or having a claim to share in the property in dispute." 8. The following passage appearing in the text of this judgment also needs special mention: "The transaction of a family settlement entered into by the parties who are members of a family Bona fide to put an end to the dispute among themselves, is not a transfer. It is not also the creation of an interest. For, in a family settlement each party takes a share in the property is admitted to that extent by the other parties. Every party who takes benefit under it need not necessarily be shown to have, under the law, a claim to a share in the property. All that is necessary to show is that the parties are related to each other in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, may, affection." 9. In this context there is also another decision of the Supreme Court in CWT vs. H. H. Vijayaba Dowager Maharani Saheb of Bhavnagar Palace (1979) 10 CTR (SC) 91 : (1979) 117 ITR 784 (SC). In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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