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TMI Blog1979 (9) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid at the time of the tilak ceremony, while the remaining amount of Rs. 3 lakhs was to be paid at the time of marriage. The assessee paid a sum of Rs. 7 lakhs to Shri Pratap Singh in September, 1952, and the remaining Rs. 3 lakhs were paid at the time of marriage of Princess Pratap Kumari with Shri Digvijay Singh in April, 1955. It appears that the marriage was unsuccessful with the result that Princess Pratap Kumari had to leave her husband's house after a short period in April, 1956. Her husband's family paid a maintenance allowance of Rs. 600 per month to the Princess from April, 1956, up to October 15, 1958. But then an agreement was entered into between Shri Digvijay Singh and Princess Pratap Kumari, as also Shri Pratap Singh and the assessee, by which it was agreed between the parties that a sum of Rs. 4 lakhs be paid to Princess Pratap Kumari as a lump sum amount in consideration of her right of maintenance. The amount of Rs. 4 lakhs towards the lump sum payment of maintenance allowance was paid by the Wankaner family to Princess Pratap Kumari by cheque for Rs. 3 lakhs dated October 15, 1958, and a pay order dated 14th October, 1958, for Rs. one lakh. It is also not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the third party and/or the fourth party and the full amount of her maintenance or claim of any kind whatsoever shall be paid by the first party from out of the money paid by the third party and the fourth parties to the first and second parties under this deed. In case the first party fails to satisfy the claim for maintenance or any other claim which the second party may make against the fourth party and the fourth party has to meet such claim then the fourth party shall be entitled to recover the same from the first party. (ii) That the said sum of Rs. ten lakhs shall be paid by the third and fourth parties in the manner stated below :-- (a) That a sum of Rs. five lakhs paid to the second party under the two agreements dated 15-10-1958 shall be deemed to have been paid by the third and the fourth parties to the first party and the second party under this deed. (b) That out of the remaining sum of Rs. five lakhs, a sum of Rs. four lakhs is paid by the third party and the fourth party to the first party and second party by crossed cheque No. NDIX 374501 dated 24th Feb., 1960, on the Central Bank of India Ltd., New Delhi, drawn in favour of the first party by the third p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o my daughter. It was nobody's intention that I should have any beneficial interest in the sum secured by that cheque even for a fraction of a second. I was made a party to this agreement also for the express purpose of indemnifying my daughter's husband and father-in-law against any further claims that she might have made against them. I merely acted as a conduit pipe in receiving and passing on the cheque for Rs. 4 lakhs dated 24-2-1960 to my daughter. Perhaps the other parties were also desirous of affixing me with knowledge of this payment, in view of the indemnity clause, to show that they were performing their part of the bargain. I solemnly declare that it was never intended by me or by the other parties to the agreement that I should have any beneficial interest in the whole or any part of the sum of Rs. 4 lakhs secured by the cheque dated 24-2-1960. I could not and did not make a gift of that sum, for it was not mine to retain or to give. " Thus the case of the assessee was that he did not make any gift as he had no beneficial interest in the amount of the cheque for Rs. 4 lakhs and that no liability to pay tax under the G.T. Act was attracted. The GTO did not accept t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilak ceremony on September 15, 1952, the remaining amount of Rs. 3 lakhs was paid by the assessee to the Wankaner family at the time of marriage. It is also apparent on the record that the marriage did not prove to be a happy one and the spouses fell apart after some time and Princess Pratap Kumari returned to her father's house in April, 1956. An agreement was executed on October 15, 1958, for payment of Rs. 4 lakhs as lump sum amount in consideration of her right of maintenance and the said sum of Rs. 4 lakhs was paid to Princess Pratap Kumari by her father- in-law. Thereafter, in order to finally settle all the disputes between the parties in financial matters and in full satisfaction of the claims and the counter-claims between them, another agreement dated February 24, 1960, was executed, and simultaneously along with the execution of the aforesaid agreement a crossed cheque for Rs. 4 lakhs was handed over by Shri Pratap Singh of Wankaner to the assessee on February 24, 1960, which, in turn, was endorsed by the assessee in favour of his daughter, Princess Pratap Kumari on that very day. Mr. Mehta appearing for the revenue submitted that by making an endorsement on the cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute between the parties that the act which is claimed as a transaction of gift by the revenue was oral and was represented by the assessee making an endorsement on the cheque for Rs. 4 lakhs given to him by his daughter's father-in-law, Shri Pratap Singh of Wankaner, on February 24, 1960, in favour of his daughter and the agreement entered into between the parties has been relied upon by the learned counsel for the revenue for the purpose of submitting that the property in the amount of the cheque belonged to the assessee. The Tribunal has taken into consideration the contents of the agreement dated February 24, 1960, and has come to the conclusion that the amount of Rs. 5 lakhs specified in part 1(ii)(a) of the agreement was paid to Princess Pratap Kumari and the amounts mentioned in sub-cls (b) and (c) were also to be paid for and on behalf of the princess. The Tribunal has also recorded that " in respect of payments under cls. (ii)(a) and (b) it is conceded that they were made to the princess and that the assessee did not become the owner ". The amount of Rs. 4 lakhs which was paid by a crossed cheque dated February 24, 1960, was the payment which has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted by the Appellate Tribunal, it cannot go to show that the property in the amount of Rs. 4 lakhs represented by the aforesaid cheque belonged to the assessee. According to the assessee,he was merely made a party to the agreement in order to indemnify his daughter's husband and father-in-law against any possible claim by his daughter in future as to maintenance or otherwise and that he was merely a conduit pipe in receiving the aforesaid cheque for Rs. 4 lakhs and passing on the same, by making endorsement thereon in favour of his daughter. If the amount represented by the cheque for Rs. 4 lakhs did not belong to the assessee, then the mere fact of an endorsement thereof by the assessee in favour of his daughter could not constitute a gift of the said amount by the assessee to Princess Pratap Kumari. It appears that there was no conscious act on the part of the assessee of transferring his assets voluntarily to his daughter, which alone could have constituted a transaction of gift. In view of the finding of fact recorded by the Tribunal, which is binding upon us, we hold that the act of the assessee in endorsing the cheque for Rs. 4 lakhs dated February 24, 1960, in favour of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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