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TMI Blog1971 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ent deed dated March 26, 1962 ? " For a proper appreciation of the scope of the reference, it is necessary to refer to the material facts that gave rise to the question : One N. Durgaiah of Secunderabad (hereinafter referred to as " the assessee ") executed a registered deed of settlement on March 26, 1962, conveying the schedule mentioned immovable properties to his five sons and two daughters out of whom one of the sons was a minor in whose favour item No. 2, a house worth Rs. 64,800, was settled. The assessee, who was called upon to file a gift-tax return in respect of the value of the properties settled by him on March 26, 1962, had filed a nil return contending, inter alia, that the provisions of the Act levying tax on gifts relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the donor's minor son, Prakash, is exempt under section 5(1)(xii) of the Act. This claim of the assessee is resisted by Sri P. Ramarao, the learned counsel for the income-tax department, contending, inter alia, that there is no merit in any of the pleas raised by the assessee. It is now settled law that gift-tax under the Act is exigible in respect of gifts of agricultural lands as the transaction involves the transfer of property in the shape of agricultural lands but the very agricultural lands were not sought to be taxed under the Act. See Second Gift-tax Officer, Mangaloye v. D. H. Mazareth and Jupudi Sesharanam v. Gift-tax Officer, Palacole We shall now turn to the contention of Sri Ramachandra Rao that the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of an arrangement or arrangement is established, there can be no family arrangement. Where one of the parties executes a document styled as settlement deed whereunder some of the properties exclusively belonging to him as his self-acquird properties are settled in favour of the other members of the family, the terms of such document do not by any stretch of reasoning amount to a family arrangement. There is no agreement or arrangement amongst the members of the family which is the essence of a family arrangement in such a transaction as the same is only a unilateral one. Indisputably for such a document the other parties who are only beneficiaries cannot be called parties to the transaction in the sense that they have entered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidenced by the document is only a settlement or a gift made by the father out of love and affection in favour of his children without any consideration in money or money's worth, exigible to tax and, hence, there is no substance in this submission of Sri Ramachandra Rao. The only point that survives for decision is whether the gift of item No. 2, a house situate in Maredpally, by the assessee in favour of his then minor son, Prakash is exempt under section 5(1)(xii) of the Act which reads thus : " (1) Gift-tax shall not be charged under this Act in respect of gifts made by any person--... (xii) for the education of his children to the extent to which the gifts are proved to the satisfaction of the Gift-tax Officer as being reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following passage in support of his plea : "....beneficiaries, above named who are all his children and dependants and for whom he is under an obligation to make provision." The aforesaid passage which appears to have been made by way of preamble is common to all the gifts and, hence, this will not assist the plea of the assessee to claim exemption under section 5(1)(xii) of the Act. However, there is no specific mention of the fact that to the minor son was gifted the house property with a view to provide for his education. No-where in the document any such reference has been made, nor the same can be gathered from the document. That apart, this claim was not raised at the earliest instance before the Gift-tax Officer. For the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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