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TMI Blog1985 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... it is necessary to consider whether it is a gift at all and whether the transaction which had been treated by the GTO as gift was a family settlement and no gift-tax was attracted. To understand the implications of the issue involved it is necessary to state in brief the facts of the case. 4. Shri Banarsi Lal Aggarwal, the assessee, was being assessed to wealth-tax in the status of an individual. He owned a property styled as Banarsi Lal Aggarwal Rice General Mills, Kaithal (rice sheller). This property consisted of lands, building and machinery. This was constructed in the year 1959-60. This property has been shown ever since then in the wealth-tax returns of the assessee as an individual up to the assessment year 1972-73. For the assessment year 1973-74, only the value of one-fourth share in this property was shown in the net wealth return by the assessee and the remaining three-fourths was said to have been given to his wife and five sons equally in a family settlement which took place on 21-6-1972 by way of a Court decree in Suit No. 1175 of 1972 in the Court of Sub-Judge, First Class, Kaithal. It was also the plea of the assessee that he could not arrange for the funds for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re that in the order of assessment, no deduction under section 5(1)viii) of the Gift-tax Act was allowed by the GTO. It was through a subsequent order passed under section 34 of the Act that the GTO considered the claim and allowed deduction of Rs. 5,400 only. He took the view that the value of the gift falling to the share of the wife was at Rs. 53,791 against which the assessee had to pay her an amount of Rs. 48,391 and, therefore, the actual gift to the wife was only of Rs. 5,400. Deduction under section 5(1)(viii) was, therefore, allowed to this extent only which was held by the Commissioner (Appeals) to have been correctly allowed. It is against the above background of facts that the appeal by the assessee has to be considered. 6. As pointed out earlier, the first point for determination is whether it is a family settlement and, therefore, no gift-tax is chargeable. Alternatively, the argument of the learned counsel for the assessee was that even though it may be deemed as a gift, the gift being of an immovable property, it should have been registered in view of the provision contained in section 123 of the Transfer of Property Act, 1882 and also in view of the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty was acquired by the assessee individually in the year 1959-60. He has been showing this property as his individual property right up to the assessment year 1972-73. He further pointed out that merely because a small amount of loans aggregating to Rs. 73,891 were advanced by his wife and four sons could not create a claim by these persons that the property belonged to them or they had interest in the property for which they could claim family settlement. He urged that at best the wife of the assessee and his four sons could sue the assessee in a Court of law for recovery of the loans and on a decree being obtained against the father, they could press for the execution of the decree against sale proceeds of the said property in case the assessee failed to pay the decreed amount otherwise. He, therefore, urged that there being no antecedent title, claim or interest in the property by the wife of the assessee and his four sons, there could be no family settlement. It was, therefore, urged by him that the claim of family settlement had been rightly rejected by the authorities below. He further urged that it was a case of transfer of self-acquired property by the assessee to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts but it is not binding on the Income-tax Department so long as it is with a view to avoid taxes. 11. The claim of the plaintiffs was readily agreed to by the assessee which only showed that it was not a genuine arrangement but only a made up affair through a Court of law. Their Lordships of the Supreme Court in the case of Kale, referred to above, have held that the family settlement must be a bona fide one so as to resolve family disputes and rival claims. In our opinion, the dispute was only a made up affair and not a real one. In the ratio of the decisions of the Supreme Court aforesaid and also of the Rajasthan High Court referred to earlier, we have no hesitation in coming to the conclusion that it is only a made up affair and not a genuine arrangement. The claim of family settlement, in our opinion, therefore, deserves to be rejected. Orders of the authorities below on this point are, therefore, upheld. 12. No figures of actual deduction of loans other than those mentioned by the authorities below have been brought to our notice on behalf of the assessee. We, therefore, do not find any justification to interfere with the orders of the authorities below in allowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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