9911796707
TMI Blog1993 (3) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... and the value of the entire extent of 11.80 acres is given as Rs. 62,000. According to the petitioner, the first respondent is entitled only to a half share in the entire area of 17.34 acres of land dealt with in the settlement deed dated December 29, 1977, and a similar half share in the entire extent of 11.80 acres dealt with in the settlement deed dated January 7, 1978. The settlement deeds dated December 29, 1977, and January 7, 1978, were presented for registration before the second respondent. As the value of the entire extent of the lands settled under the two documents exceeded Rs. 50,000, the second respondent took the view that the documents dated December 29, 1977, and January 7, 1978, could be registered only on production of the certificates under section 230A(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The first respondent who is the executant of the settlement deeds, by letter dated August 3, 1979, informed the second respondent of his inability to produce the certificate under section 230A(1) of the Act. Thereupon, the second respondent, by separate orders, on September 12, 1979, refused to register the settlement deeds dated December 29, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t deeds that determined the applicability of section 230A and that merely because the properties transferred form part of a larger extent the entirety of it cannot be taken into account for the purpose of determining the applicability of section 230A, particularly when the first respondent is entitled only to half share in the properties dealt with under the two settlement deeds in question. Per contra, Mr. N. V. Balasubramaniam, learned counsel for respondents Nos. 4 and 5 submitted that, under section 230A of the Act, where a document is required to be registered under the Indian Registration Act, 1908, purporting to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property valued at more than Rs. 50,000, a certificate as prescribed therein from the concerned Income-tax Officer shall be produced before the registering authority. Learned counsel further contended that it is not the value of the interest of the person transferring the property, but the value of the property as a whole in which such interest is sought to be transferred that is the criterion for the purpose of section 230A. In support of his contention, learned counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits Tax Act, 1940 (15 of 1940), the Business Profits Tax Act, 1947 (21 of 1947), the Indian Income-tax Act, 1922 (11 of 1922), the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1957 (29 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Super Profits Tax Act, 1963 (14 of 1963), and the Companies (Profits) Surtax Act, 1964 (7 of 1964) ; or (b) the registration of the document will not prejudicially affect the recovery of any existing liability . . . ..." In N. C. Rangesh v. Inspector-General of Registration [1991] 189 ITA 270 (Mad), Bakthavatsalam J., while holding that, in the case of sale of undivided interest in land of value below the limit prescribed in section 230A, the provisions of the said section 230A or Chapter XX-C of the Act will not apply even if the value of the entire land is above the limit prescribed under the said provisions, observed as follows (at page 282): " In my view, the criterion to obtain a certificate either under section 230A of the Income-tax Act, 1961, or under Chapter XX-C should be the value of the property or the interest of the person in such property that was sought to be transferred and it was only with respect to that extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities have taken into consideration the value of the entire property, though it is stated that the interest of the sisters relinquishing the property is only 3/40ths share. It is obvious that they are not concerned with the major chunk of the property and their right is restricted only to 3/40ths share and they can either transfer or relinquish to the extent of 3/40ths share only. It is only with respect to this extent that the income-tax clearance certificate can be insisted upon. It is not disputed that the valuation of this interest is only Rs. 21,775 and it does not exceed Rs. 50,000. Therefore, section 230A is not applicable and, hence, the authorities erred in insisting upon the production of the income-tax clearance certificate. " I am in entire agreement with the view expressed by the learned judges in the decisions referred to above. The position of law which emerges from the decisions referred to above is this : According to section 230A(1) of the Act, an income-tax clearance certificate is necessary only when the value of the right, title or interest of the transferor sought to be transferred under the document exceeds the limit prescribed under the said section. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the lands dealt with in the settlement deeds in question. From this it follows that only with respect to the extent of the half share in the properties settled under the two settlement deeds, the income-tax clearance certificate can be insisted upon. It is seen from the settlement deed dated December 29, 1977, that the value of the half share is given as Rs. 40,350. Similarly, the value of the half share dealt with under the settlement deed dated January 7, 1978, is given as Rs. 31,000. As the valuation of the interest of the first respondent conveyed under both the settlement deeds does not exceed Rs., 50,000, it has to be held that section 230A is not applicable to the documents in question and respondents Nos. 2 and 3 erred in insisting upon the production of the income-tax clearance certificate. Therefore, the impugned orders are illegal and they are liable to be quashed. As I am accepting the main contention of learned counsel for the petitioner, it is not necessary to deal with the other contentions urged on behalf of the petitioner. For all the reasons stated above, the writ petitions are allowed, the impugned orders are quashed and the second respondent is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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