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TMI Blog1984 (1) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ent noticed that in the last paragraph just before the schedule of the property contains a clause which reads as under: "It is hereby declared that the said trustees shall be competent during the lifetime of the settlor with his consent in writing and thereafter at their discretion to transfer by way of sale or mortgage or otherwise the settled property or any part thereof." The GTO also found that for the purpose of income-tax assessment it was held by the ITO that the transfer was a revocable transfer and, accordingly, the income from the transferred property was assessed in the hands of the settlor. The GTO also found that the settlor had executed a deed of rectification on 21-7-1973 which clause 1(d) and clause 2 were changed. Again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld the action of the GTO. 2. The assessee has come up in further appeals before us and the learned counsel for the assessee contended that the deed of settlement dated 5-12-1969 was operative and, therefore, the assessment for the assessment year 1970-71 should not have been made on protective measure. He contended that according to section 122 of the Transfer of Property Act, 1882 that the gift was complete inasmuch as there was absence of consideration and the trustees accepted the gift from the donor on that day. He invited our attention to the provisions of section 4(b) of the Gift-tax Act, 1958 ('the Act'), to show that a property having transferred for a consideration which having regard to the circumstances of the case has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the fact that the settlor retained certain interest in the gifted property in the deed of settlement executed on 5-12-1969 the lower authorities were justified in treating the said deed as a revocable one. He also highlighted the reasons given by the GTO for determining the valuation of the settled property. 4. We have heard the submissions made by both the parties before us and considered the facts of the case. The first question that arises for consideration is whether the deed of settlement executed by the assessee on 5-12-1969 contained any clause or clauses which indicated that there was no complete transfer of the immovable property which was settled by the assessee in favour of his wife and his son. It may be noted that this ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case the deceased had gifted properties to his wife and children. In respect of the gift to the wife he had expressed the hope that the wife would maintain him during his lifetime. It was held that there was no retention of any interest in the properties. It has also been held in the case of Mohammed Bhai v. CED [1968] 69 ITR 770 (AP) and Sunil Roy v. CED [1970] 77 ITR 668 (Cal.) that merely because the deceased was living in a house gifted by him to his wife it cannot be stated that he derived any benefit from the subject-matter of gift. The whole purpose for the assessment under the Act is where any property is transferred otherwise than for adequate consideration the amount by which the property is transferred is to be treated as gift. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessable during the assessment year 1969-70. Accordingly, we direct that the word 'protective' from the order of the assessment dated 15-3-1979 for the assessment year 1970-71, be removed and the said assessment be treated as regular assessment. 5. In view of our aforesaid findings, the assessment made by the ITO for the assessment year 1974-75 has become infructuous which is fit to be annulled. This leaves us with the question regarding the valuation of the gifted property. A perusal of the assessment order would show that the assessee returned the value of the gift at Rs. 1,10,000 on the basis of the rental method which was also supported by the report of an approved valuer. The GTO enhanced the value at Rs. 2,00,000 by applying land a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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