9911796707
TMI Blog1979 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... R. S. PATHAK. JUDGMENT The judgment of the court was delivered by UNTWALIA J.-- These are three appeals by special leave filed by the Commissioner of Wealth-tax, Mysore, from the judgment of the Mysore (now Karnataka) High Court. The assessee is the Dowager Maharani of Gondal. Her husband, His Higness Bhojjrajji Maharaja Saheb of Gondal, died intestate on July 31, 1952, leaving considerable movable and immovable properties. Certain disputes and difference arose after his death between his two sons, namely, Maharaja Vikramsinghji and his younger brother Shivaraj Singhji, in respect of the assets left by the late Maharaja Saheb. The younger brother was contemplating legal proceedings against his elder brother. Their mother intervene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, viz., 1960-61, 1961-62 and 1962-63. The corresponding valuation dates of the said assessment years are December 31, 1959, December 31, 1960, and December 31, 1961. It would be noticed that the assessee under the arrangement arrived at between the parties became liable to pay the balance of the amount of Rs. 30,00,000 to Shivaraj Singhji as Vikramsinghji out of the sum of Rs. 50,00,000 mentioned in the letter dated May 14, 1953, paid only Rs. 20,00,000. The assessee succeeded in wiping off her liability to the extent of Rs. 11,00,000 on September 12, 1959, by transfer of war stock. The balance of the liability, i.e., Rs. 19,00,000, remained due and continued to be due on all the three valuation dates aforesaid. It could be wiped off by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation dates and could not be deducted from the valuation of the assessee's wealth. In our opinion the argument is not sound. Taking the totality of the facts as found by the Tribunal and mentioned in the impugned judgment of the High Court, it was a case of family settlement or family arrangement which is binding on the parties concerned. The assessee agreed to purchase peace for the family and to pay to her son the amount which fell short of Rs. 50,00,000 if her elder son did not pay any portion thereof. It is well established that such a consideration is a good consideration which brings about an enforceable agreement between the parties. Section 25 of the Contract Act does not hit this. It may be further pointed out that even if it be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, if not earlier, the liability of the mother became enforceable by law on the latter date. Learned counsel for the appellant cited three decisions of this court to support his argument, viz., Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 (SC), Standard Mills Co. Ltd. v. CWT [1967] 63 ITR 470 (SC) and Bombay Dyeing and Manufacturing Co. Ltd. v. CWT [1974] 93 ITR 603 (SC). None of them is quite apposite on the point at issue before us. In the case of Kesoram Industries [1966] 59 ITR 767 (SC), it was held that " debt owed " within the meaning of s. 2(m) of the W.T. Act, 1957, could be defined as the liability to pay in praesenti or in future an ascertainable sum of money. It was held that a liability to pay income-tax w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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