9911796707
TMI Blog1977 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... der the will left by her father, the assessee is the absolute owner of the properties and the surrendering of properties of the value of Rs. 88,200 to her sons and daughters amounted to transfer by way of gift and chargeable to gift-tax. 2. Before the AAC it was contended that the document, dt. 17th Dec., 1971, is only a family arrangement, which was entered into to put an end to the disputes which have arisen between the assessee and her children and secure peace and harmony in the family and no gift was effected by the said deed. The AAC held that the pooling of the properties and division effected by the deed, dt. 17th Dec., 1971, constituted a valid family arrangement and there has been no transfer of property by the assessee to her c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the will left by her father in favour of her minor children attracts liability to gift-tax. 6. The assessee s paternal grandfather Shri Ranga Konar executed a will on 11th Sept., 1930 bequeathing his properties to his five sons. After the death of Shri Ranga Konar, the sons found it difficult to divide the properties as per the will of their father. With the help of the Panchayatdars, they entered into an agreement on 3rd Dec., 1934 to treat the will as inoperative and effect a partition of the properties by drawing up a partition deed. In pursuance of the said agreement, the sons of Shri Ranga Konar (including Shri Chinna Venkatachala Konar the assessee s father) executed a partition deed and certain properties thus came to be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and two daughters. The assessee wanted to alienate a portion of the properties, which she received under the will left by her father. Misunderstandings arose between the assessee and her children, as they maintained that the assessee is only a limited owner entitled to enjoy the properties during her life time and she cannot alienate the properties except for family necessity. While the assessee claimed absolute title over the properties received by her under the will, her sons and daughters contended that on the death of Shri Chinna Venkatachala Konar in 1951, the Hindu Succession Act, 1955, has not come into force and consequently, in respect of the properties received by her, she was only entitled to a limited estate. The assessee s c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich may not involve legal claims will suffice. Members of a joint Hindu family may, to maintain peace or to bring about harmony in the family, enter into such a family arrangement. It such an arrangement is entered into bona fide and the terms thereof are fair in the circumstances of a particular case, courts will more readily give assent to such an arrangement then to avoid it." 9. In Ziauddin Ahmed vs. CGT(3) the assessee had children by two wives. The assessee and the members of his family held shares and the Khanikar Tea Estate (P) Ltd. and Ahmed Tea Co (P) Ltd. The children of different wives of the assessee were not having good relations and there were family quarrels. When the matter took a serious turn, a family arrangement was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the decisions cited above, the essential ingredients to constitute a valid family arrangement can be summed up as under: To constitute a valid family arrangement all that is necessary to show is there must be a situation of contest or apprehension of some dispute in future. It is not necessary that the contestants must have antecedant title. It is sufficient, if there is a possible claim or even a semblance of a claim. The main object of a family arrangement is to settle present or a future dispute regarding property amongst members of the family. It tends to the preservation of the family property and secure peace and harmony in the family thereby avoiding disputes and litigation and thus saving the honour of the family. 11. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing the validity of the will by taking up the matter right the Supreme Court. Viewed in this background, there is some basis for a genuine apprehension in the mind of the assessee of a possible dispute regarding the nature of estate in the properties bequeathed to her under the will and to avoid litigation and preserve the family peace and harmony, she thought it fit to part with a portion of the properties received by her under a will in favour of her sons and daughters and secure for herself recognition and consent of her sons and daughters that she is the absolute owner of the properties bequeathed to her under the will. That the assessee was very much interested for securing herself the consent and recognition of the sons and daughters ..... X X X X Extracts X X X X X X X X Extracts X X X X
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