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TMI Blog2001 (5) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case, the Tribunal is correct in law in holding that as on December 1, 1972, when the F sum was gifted there was a right of allotment in existence which also stood transferred along with the gift on December 1, 1972 ?" The relevant assessment year is 1973-74 for which the previous year ended on March 31, 1973. The factual position in a nutshell is as follows : One Shri Satish Gujral had booked office accommodation, measuring 2,100 sq. ft. on the seventh floor of the multi-storeyed building known as "Kanchanjunga" at 18, Barakhamba Road, New Delhi. The building was being constructed by Kailash Nath and Associates (hereinafter referred to as "builders"). Satish Gujral had paid a sum of Rs. 60,000 to the builders. H A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s daughters Ms. Sunila Bawa, as joint nominees with respect to the office accommodation booked by him in the building under construction. He requested the necessary correction to be carried out in their records. The builders were also informed that all the amounts paid by the assessee may be credited to their joint account. The builders confirmed that they had accepted the nomination of the son and daughter of the assessee in his place in respect of the accommodation booked by the assessee and that all the amounts paid by him had been transferred to the joint account of his son and daughters The assessee's son and daughter accepted the gifts on January 20, 1973, and December 1, 1972, respectively. Thereafter Sandeep Singh Bawa and Ms. Sunil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee filed an appeal before the Commissioner of Gift-tax (Appeals) (in short the "CGT(A)") and questioned the correctness of the computation. The first appellate authority held that the subject-matter of the gift was not only Rs. 1,20,286 but also certain valuable rights transferred which the assessee had acquired by making the aforesaid payments. He did not accept the assessee's submission that only Rs. 1,20,286 were gifted by the assessee. He observed that the true intent of what the assessee did was to diminish the value of his own property by ensuring that the flat was not allotted to him but to his children by the builders. The value of the gift was worked out on the basis of rent which was taken to be Rs. 3,213 per month. The market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et 1/2 share of the amounts paid and lying to my credit with the builders. I am also informing the builders, by a separate formal letter, that I have appointed both of you as the nominee so that the benefit of the agreement shall also stand transferred to you. Now I will walk out of the picture just in the same way as Mr. Satish Gujral and you will have direct dealings with the builders and be entitled to all the benefits of the agreement in your own right. This will also entail an obligation on you to pay further amounts to the builders as and when those become due hereafter. Let me have your acceptance of the gift of the amounts and the transfer of the benefits under the agreement with builders. The son and daughter of the assessee acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the transaction and the value, if any, that can be put. As noted earlier, Satish Gujral was paid not only the amount proportionate to the area for which the arrangement was entered into with the assessee, but also the premium of Rs. 5,000. A recent decision of the apex court in CWT v. Prince Muffakham Jah Bahadur Chamlijan [2001] 247 ITR 351 deals with valuation of inalienable rights. It was held that when an assessee has a right to reside in the house for the duration of his life, the same was property which could have a market in an assumed market place, Even if the right was personal yet an assumed somebody would acquire this personal right in the property during his lifetime and pay the price for it. The above being the position, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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