HIROMI DEEPAK SHAH, MUMBAI V. ASST CIT 27(2), NAVI MUMBAI

ITA 4205/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1734 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Keywords: Sale consideration of property below Jantri Value; Deemed Gift on Purchase of immovable Property below Jantri value; Gift
• Section: 143(3); 11; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4205/M/2016 ASSESSMENT YEAR: 2012-13 HIROMI DEEPAK SHAH, 601-602, TITAN HOUSE, M.P. VAIDYA MARG, GHATKOPAR (E), MUMBAI 400 077 PAN: AAPPS8096K VS. ACIT 27(2), VASHI IT OFFICE, 4 TH FLOOR, 6 VASHI STATION COMPLEX, NAVI MUMBAI 400 733 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NISHIT GANDHI, A.R. REVENUE BY : SHRI V. VIDHYADHAR, D.R. DATE OF HEARING : 11.07.2018 DATE OF PRONOUNCEMENT : 30.08.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 21.03.2016 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED CIT IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER U/S 56 AT RS. 26,73,500/-. 2. SECTION 56 OF INCOME TAX ACT DOES NOT REFER TO ' GIFT'' BUT IT REFERS TO ONLY RECEIPT'' THE TAXABLE EVENT IS THE RECEIPT OF THE P ROPERTY AND NOT THE COMPLETION OF THE GIFT. 3. THE LEARNED CIT HAS ERRED IN SAYING THAT THE GIF T DEED EXECUTED WAS NOT DATED. IN FACT THE GIFT DEED STARTED WITH THE REMAR K THAT IT WAS EXECUTED ON 16TH AUGUST 2009. ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 2 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDITION BY LD. CIT(A) AS MADE BY TH E AO UNDER SECTION 56 OF THE ACT TO THE TUNE OF RS.26,73 ,500/- BY REJECTING THE GIFT DEED DATED 16.08.2009 BY HOLDIN G THAT THE GIFT HAS ACTUALLY BEEN TAKEN PLACE ON SUBSEQUENT DA TE I.E. 13.09.2011 ON WHICH THE DEED OF GIFT WAS DULY REGISTE RED. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 25.09.2012 DECLARING AN INCOME OF RS.26,69,610 /- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . THEREAFTER THE CASE OF ASSESSEE WAS SELECTED FOR SC RUTINY AFTER FOLLOWING THE DUE PROCESS OF LAW. THE AO, DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, OBSERVED THAT THERE WAS A GI FT IN FAVOUR OF THE ASSESSEE BY MRS. RANJANA VIRENDRA SHA H ON 13.09.2011 WHEREBY THE DONOR HAS TRANSFERRED 50% OF S HARE IN OFFICE NO.102, 1 ST FLOOR, TITAN HOUSE, CO-OPERATIVE HOUSING SOCIETY LTD., PLOT NO.83, M.P. VAIDYA MARG, GHATKOPAR (E ), MUMBAI 400 077. THE DONOR HAS TRANSFERRED HER RIG HT, TITLE AND INTEREST IN THE PROPERTY AS GIFT TO THE DONEE, THE MARKET VALUE WHICH AS PER STAMP DUTY VALUATION WAS RS.1,04,48,064/-. ACCORDINGLY, THE 50% OF THE SAID P ROPERTY WORKED OUT TO RS.53,47,000/- WHICH HAS COME IN THE HANDS OF THE ASSESSEE. THE AO FURTHER OBSERVED THAT THE DON OR OF THE PROPERTY IS AUNT-IN-LAW OF THE DONEE AND SINCE AUNT -IN-LAW IS NOT COVERED UNDER THE DEFINITION OF RELATIVE AS ENV ISAGED BY THE PROVISION OF SECTION 56(2)(VI) OF THE ACT, THE ASSESSEE WAS ACCORDINGLY ISSUED A SHOW CAUSED NOTICE AS TO WHY T HE GIFT SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE W HICH WAS REPLIED BY THE ASSESSEE AS UNDER: ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 3 1. THE GIFT DEED EVIDENCES THE GIFT OF PREMISES TO ME BY MY AUNT IN LAW MRS RANJAN VIRENDRA SHAH WAS REGISTERED IN MONTH OF SEPTEMBER 2011, BUT IT WAS EXECUTED AND THE SAID GIFT WAS COMPLETED PRI OR TO 30 TH SEPTEMBER 2009 BY GIFT DEED. THE COPY OF GIFT DEED IS, ATTACH ED HEREWITH. 2. YOUR KIND ATTENTION IS INVITED TO THE PROVISIONS OF SECTION 56 OF THE IT ACT WHERE THE GIFT OF IMMOVABLE PROPERTY PRIOR TO 1 .10.2009 WAS EXEMPTED FROM TAX. 3. THE EFFECTIVE DATE OF GIFT EXECUTION AND NOT THE DATE OF REGISTRATION. YOUR KIND ATTENTION IS INVITED TO SECTION 47 IN THE REGISTRATION ACT, 1908 WHICH READS AS UNDER: 47. TIME FROM WHICH REGISTERED DOCUMENT OPERATES-A REGISTERED DOCUMENT SHALL OPERATE FROM THE TIME WHICH IT WOULD HAVE COMMENCED TO OPERATE IF NO REGISTRATION THEREOF HAD BEEN REQUIRED OR MADE, AND NOT FROM THE TIME ITS REGISTRATION' 5. THE AO, HOWEVER, DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE THAT THE SAID GIFT DEED WAS COMPLETED PRIO R TO 30.09.2009 BY WAY OF GIFT DEED WHICH WAS DULY NOTARIZ ED AND AS SUCH THE GIFT IS EXEMPT UNDER SECTION 56 OF THE ACT AS GIFT OF IMMOVABLE PROPERTY HAPPENED PRIOR TO 01.10.2009 AND F INALLY THE AO ADDED THE SAME TO THE INCOME OF THE ASSESSE E UNDER SECTION 56 OF THE ACT WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) VIDE ORDER DATED 25.03.2015 BESIDES MAKING OTHER ADDITIONS. 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING A ND HOLDING AS UNDER: 3.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. AS REGARDS THE FIRST GROUND OF APPEAL IS CONCERNED, TH E APPELLANT HAS FILED A COPY OF THE GIFT DEED DATED 16.08.2009 . THIS DEED WAS ENTERED ON A NON JUDICIAL PAPER OF RS. 100/- DATED 6 TH AUGUST 2009. ACCORDING TO THIS DEED, 50% OF THE OWNERSHIP RIGHTS OF SMT. RANJAN VIRENDRA SHA H HAS BEEN ASSIGNED TO THE DONEE, SMT. HIROMI DEEPAK SHAH, AND SMT. JIG NA PIYUSH SHAH WHO GET 25% OF THE TOTAL RIGHTS EACH OF THE PROPERTY WITHOU T ANY CONSIDERATION. OTHER THAN THE DATE OF THE NON JUDICIAL PAPER, THIS DEED IS NOT DATED AT ANY OTHER PLACE. THIS HAS BEEN SIGNED BY THE DONOR AS WELL AS THE DONEES AND THE ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 4 WITNESSES WHO ARE CLOSE RELATIVES WITHOUT ANY DATES BEING INDICATED. SUBSEQUENTLY, ANOTHER DEED WAS PREPARED AND REGISTE RED ON 13 TH OF SEPTEMBER 2011. ACCORDING TO THIS DEED WHICH HAS BE EN REGISTERED, IT IS INDICATED THAT SMT. RANJAN VIRENDRA SHAH ALONG WITH SHRI RANJAN BHAILAL SHAH WERE THE MEMBERS OF TITAN HOUSE CO.OP. HSG.LTD. ARE THE OWNERS OF FIVE SHARES OF THE FACE VALUE OF RS. 50 EACH BEARING SHA RE CERTIFICATE NO.2 AND DISTINCTIVE NOS. FROM 6 TO 10. THE DONOR BEING THE AUNT-IN-LAW OF THE DONEES, HAS GRANTED, CONVEYED AND TRANSFERRED THE D ONEES, HER SHARE IN THE SAID OFFICE VIZ, 102, TITAN HOUSE CO.OP.HSG.LTD ., GHATKOPAR(EAST), MUMBAI. IT IS AGAIN INDICATED THAT THE DONEES SHALL TAKE ALL NECESSARY STEPS TO GET THE 50% INTEREST IN THE SAID SHARE TRA NSFER IN THEIR NAME AT THEIR OWN COST AND EXPENSES. AS PER THE ANOTHER DOC UMENT, BEING THE LEAVE & LICENSE AGREEMENT, SMT. RANJAN BHAILAL SHAH , SMT. JIGNA PIYUSH SHAH AND HIROMI DEEPAK SHAH, BEING THE LICENSORS WH O ARE THE OWNERS OF THE PREMISES AT 102, HOUSE CO.OP.HSG.LTD., HAVE GIV EN THE PREMISES ON LEAVE AND LICENSE TO M/S. TITAN LABORATORIES P.LTD. BY WAY OF LEAVE AND LICENSE AGREEMENT DATED 1 ST OCTOBER 2011. ON CONSIDERATION OF ALL THESE DETAILS WHICH HAVE BEEN FILED WITH THE ASSESSING OF FICER, IT IS SEEN THAT THE GIFT HAS ACTUALLY TAKEN PLACE IN THE YEAR 2011 WHEN THE DEED OF GIFT WAS REGISTERED WITH THE REGISTRAR. THERE ARE TWO DO CUMENTS IN THIS REGARD WHICH HAVE BEEN FILED WITH THE ASSESSING OFF ICER. THE GIFT DEED ON 16/8/2009 WHICH IS ON A NON JUDICIAL PAPER OF RS.10 0/- IS A GENERAL STATEMENT WITHOUT GIVING ANY DETAILS AS TO THE WAY AND METHOD OF TRANSFERRING THE PROPERTY TO THE APPELLANT. AS INDI CATED ALREADY, THIS DEED IS SIGNED BY THE DONOR AND DONEES WITHOUT ANY DATE AND THE WITNESSES ARE CLOSE RELATIVES LIKE BHAILALB SHAH AN D RANJAN B. SHAH. IN ALL PROBABILITY AS INDICATED BY THE ASSESSING OFFICER, THIS HAS BEEN AN ATTEMPT TO CREATE A SITUATION, WHERE TRANSFER WAS S AID TO HAVE BEEN TAKEN PLACE BEFORE 1 ST OF OCTOBER 2009. ACCORDING TO THE AMENDED PROVISIONS OF SECTION 56(2)(VII) OF THE ACT, WHERE AN INDIVIDUAL RECEIVES IN ANY PREVIOUS YEAR FROM ANY PERSON OR PERSONS ON OR AFTER 1 ST OF OCTOBER 2009 ANY IMMOVABLE PROPERTY WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WHICH EXCEEDS RS. 50,000/-, THE STAMP DUTY VALUE OF SUCH PROPERTY SHALL BE BROUGHT TO TAX UNDER THE HEAD 'IN COME FROM OTHER SOURCES'. THE CASE OF THE APPELLANT ALSO DOES NOT FALL UNDER THE PROVISO TO THE SECTION WHERE, IF THE GIFT HAS BEEN RECEIVED FROM ANY RELATIVE OR ON THE OCCASION OF MARRIAGE ETC., THE SECTION SHALL NOT APPLY. THE APPELLANT IN HER STATEMENT HAS ALSO STATED THAT THE PROVISIONS OF SECTION 56 OF THE ACT SHALL APPLY THE MOMENT AN IMMOVABLE I S RECEIVED BY THE DONEE AND IT DOES NOT DEPEND ON THE TIME WHEN THE P ROPERTY WAS REGISTERED, IF IT IS REQUIRED. IN SHORT, THE LIABIL ITY IN SUCH CASE ARISES IN THE YEAR OF RECEIPT AND NOT IN THE YEAR OF REGISTRATION . MOREOVER, SHE HAS ALSO REFERRED TO THE COMMENTARY OF SHRI SAMPAT IYEN GAR IN 'THREE NEW TAXES' IN WHICH IT IS INDICATED THAT, A DEED OF GIF T WOULD BE COMPLETE AS SOON AS THE DOCUMENT OF GIFT IS SIGNED AND ATTESTED . THE CIRCUMSTANCE THAT IT IS NOT REGISTERED IS IMMATERIAL SINCE REGIS TRATION IS MERELY 'A SOLEMNITY IN ORDER TO ENFORCEMENT OF A GIFT OF IMMO VABLE PROPERTY'. NON REGISTRATION DOES NOT SUSPEND THE GIFT UNTIL REGIST RATION ACTUALLY TAKES PLACE. I HAVE CONSIDERED THIS SUBMISSION TOO. IT IS TO BE NOTED THAT AS PER ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 5 THE DETAILS WHICH HAVE BEEN FURNISHED, THE GIFT HAS BEEN MADE IN THE YEAR 2011 AND NOT IN 2009 AS HAS ALREADY BEEN INDICATED. THE GIFT DEED SAID TO HAVE BEEN ENTERED INTO 2009 WAS ONLY A GENERAL STAT EMENT INDICATING THE INTENTION OF THE DONOR TO GIFT HER RIGHTS IN THE PR OPERTY TO THE DONEE, WHEREAS, ON PERUSAL, IT IS SEEN THAT THE GIFT WHICH IS REGISTERED IN THE YEAR 2011 PROVIDES ALL INFORMATION LIKE THE DETAILS OF THE SHARES WHICH THE DONOR HAS TRANSFERRED TO THE DONEE AND OTHER RE LEVANT INFORMATION. THIS IS FURTHER REINFORCED BY THE FACT THAT THE LIS ENSORS INCLUDING THE APPELLANT HAD ENTERED INTO A LEAVE AND LICENSE AGRE EMENT FROM 1 ST OCTOBER 2011 WITH TITAN LABORATORIES JUST AS THE DE ED WAS REGISTERED. THEREFORE, THE SUBMISSION OF THE APPELLANT THAT THE GIFT IS COMPLETE IN THE YEAR 2009 AND NOT IN THE YEAR UNDER CONSIDERATI ON HAS NO FORCE. THE COMMENTARY WHICH HAS BEEN REFERRED TO BY THE APPELL ANT REFERS TO DOCUMENTS BEING SIGNED AND ATTESTED. THE GIFT DEED OF 2009 HAS ONLY BEEN SIGNED AND NOT ATTESTED. WITNESSES ARE THEMSEL VES FAMILY MEMBERS OF THE DONOR AND DONEE, NAMELY; RANJAN B.SHAH AND B HAILAL B. SHAH. THEREFORE, THE CONCLUSION ARRIVED AT BY THE ASSESSI NG OFFICER APPEARS TO BE VALID AND THEREFORE, THE CLAIM THAT THE GIFT IS EXEMPT U/S.56 IS NOT CORRECT. AS A RESULT, THIS GROUND OF APPEAL IS DISM ISSED. 7. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS IN APPEAL BEFORE US. THE LD. A.R. SUBMITTED BEFORE TH E BENCH THAT THE ASSESSEE HAS BEEN GIFTED 50% OF THE PROPER TY IN QUESTION VIDE GIFT DEED DATED 16.08.2009 WHICH WAS EXECUTED ON A NON JUDICIAL STAMP PAPER OF 100/- EACH DATED 1 6.08.2009 DULY NOTARIZED . THE LD. COUNSEL SUBMITTED THAT VID E THE SAID GIFT DEED THE ASSESSEE HAS BEEN GIFTED 50% OF THE O WNERSHIP RIGHTS IN THE SAID PROPERTY BY THE DONOR MRS. RANJAN A VIRENDRA SHAH AUNT IN LAW OF THE ASSESSEE. THE LD. A.R. SUBMI TTED THAT THE FIRST APPELLATE AUTHORITY HAS TOTALLY MISCONSTR UED THE FACTS OF THE CASE BY HOLDING THAT THE SAID DEED WAS EFFEC TIVE WHEN REGISTERED ON 13.09.2011 WHEREAS THE LD. A.R. VEHEMENTL Y REFERRED TO THE 1 ST PARA OF THE GIFT DEED WHICH STATED THAT THIS DEED OF GIFT WAS MADE AT MUMBAI THIS 16 TH DAY OF AUGUST IN THE YEAR 2009 BETWEEN AND THUS SUBMITTED THAT THE LD. CIT(A) HAS NOT EVEN APPRECIATED THE INSTRUMENT OF G IFT CORRECTLY AND FURTHER ARGUED THAT THE OPINION OF T HE LD. CIT(A) ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 6 IS BASED ON THE SURMISES AND CONJUNCTURE AND NOT ON THE FACTS OF THE CASE. THE LD. A.R. FURTHER ARGUED THAT THE S AID GIFT DEED WAS DULY NOTARIZED AND SIGNED BY TWO WITNESSE S WHICH THE LD. CIT(A) HAS NOT ACCEPTED BECAUSE OF THE FACT THAT BOTH THE WITNESSES WERE FAMILY MEMBERS OF THE ASSESSEE W HICH CAN NOT BE A GROUND FOR REJECTING VALIDLY EXECUTED GIFT DEED. THE LD. A.R. FURTHER SUBMITTED THAT SUBSEQUENTLY ANOTHER GIFT DEED DATED 13.09.2011 WAS EXECUTED AND REGISTERED BY THE SAME PARTIES WITH THE EXACT TERMS AND GIFTING THE SAME PROPERTY TO THE SAME PARTY AS STATED IN THE GIFT DEED DATED 16. 08.2009. THE LD. A.R. FURTHER SUBMITTED THAT IT IS A SETTLED L AW THAT POST REGISTRATION THE DOCUMENT ACTS RETROSPECTIVELY FROM WHEN IT WAS EXECUTED/ACTED UPON BY THE PARTIES. THE LD. A. R. FURTHER TOOK US THROUGH THE 1 ST PROVISO TO SECTION 56(2)(VII)(B) OF THE ACT WHICH PROVIDES FOR A SITUATION WHERE THE PROPER TY COULD BE TRANSFERRED BY WAY OF AN UNREGISTERED AGREEMENT AND IN THAT EVENT ALSO THE STAMP DUTY VALUE HAS TO BE TAKEN OF THE DATE OF AGREEMENT WHEN THE AGREEMENT WAS ENTERED INTO. THE LD. A.R. SUBMITTED THAT THE SAID GIFT DEED WAS EXECUTED W HICH WAS DONE BETWEEN THE MEMBERS OF THE FAMILY FOLLOWING A FAMILY SETTLEMENT TO BE ENTERED INTO BETWEEN THE MEMBERS O F THE FAMILY SO AS TO DEMARCATE, RE-ALIGN AND CRYSTALLIZE THE SHARES/CLAIMS OF VARIOUS FAMILY MEMBERS WITHIN THEM SELVES SO AS TO AVOID ANY FUTURE DISPUTES REGARDING THE PROPE RTIES AND BUSINESSES CARRIED OUT BY THE THEM TOGETHER. AS T HE BUSINESS OF THE FAMILY WAS GOING ON JOINTLY BETWEEN FATHER-I N-LAW OF THE ASSESSEE SHRI BABULAL AND HIS BROTHER SHRI VIRENDRA B. SHAH AND AFTER THEIR WITHDRAWAL FROM THE BUSINESS NEW GE NERATION ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 7 WAS STEPPING IN. THE LD. A.R. SUBMITTED THAT THE SE TTLEMENT AND SEPARATION EXERCISE CONTINUED FROM 2009 TO 2012 BETWEEN THE FAMILY MEMBERS OF SHRI BHAILAL BABULAL SHAH AND SHRI VIRENDRA BABULAL SHAH FAMILY WHICH WAS FINALLY COMP LETED IN 2012. THE LD. A.R. SUBMITTED THAT DUE TO THE SAID SET TLEMENT THE PROPERTIES WHICH WENT TO THE FATHER IN LAW OF T HE ASSESSEE AND HIS FAMILY AND THE FAMILY OF SHRI VIRENDRA BABU LAL SHAH AND HIS FAMILY WERE SEPARATED BY SURRENDERING/TRANS FERRING THE SHARES BY THESE PARTIES INTERSE. THE SAID PROPE RTY IN QUESTION I.E. 102, 1 ST FLOOR, TITAN HOUSE CO-OPERATIVE HOUSING SOCIETY LTD. WAS JOINTLY OWNED BY MOTHER IN LAW OF T HE ASSESSEE, MRS. RANJAN BHAILAL SHAH AND AUNT IN LAW MRS. RANJANA VIRENDRA SHAH WHO IS WIFE OF SHRI VIRENDRA BHAILAL SHAH. THE MOTHER IN LAW OF THE ASSESSEE AND AUNT I N LAW HELD 50% OF SHARE EACH IN THE SAID PROPERTY AND THIS PRO PERTY WAS ALSO A PART OF THE FAMILY SETTLEMENT ENTERED INTO B Y THE FAMILY MEMBERS. THE LD. COUNSEL SUBMITTED THAT PURSUANT TO THE GIFT DEED DATED 16.08.2009 SMT. RANJAN BHAILAL SHAH GIFTED HER RIGHTS/SHARE IN THE TITAN HOUSE PROPERTY TO THE ASS ESSEE AND HIS SISTER IN LAW EQUALLY AND THEREAFTER THE PROPER TY WAS RENTED OUT TO ANOTHER GROUP CONCERN M/S. TITAN LABO RATORIES P. LTD. THE LD. A.R. SUBMITTED THAT EVEN THE NATURAL LOVE AND AFFECTION IS A GOOD CONSIDERATION AND THEREFORE ONC E THE GIFTS ARE ACCEPTED BY THE AO AND THE LD. CIT(A), THE SAME IS MADE OUT OF NATURAL LIFE AND AFFECTION FOR VALID CONSIDE RATION, THE PROVISIONS OF SECTION 56(2)(VII)(B) COULD NOT BE AT TRACTED. THE LD. A.R. RELIED ON THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF TULSIDAS KILACHAND VS. CIT (1961) 42 ITR 1 (SC). THE ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 8 LD. A.R. FURTHER RELIED ON THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF CIT VS. HER HIGHNESS VIJAYABA, DOWAGER MAHARANI SAHEB OF BHAVNAGAR (1979) 117 ITR 784 (SC) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT A F AMILY SETTLEMENT/ARRANGEMENT IS A GOOD CONSIDERATION FOR THE VALIDITY OF A CONTRACT. THE LD. A.R. SUBMITTED THAT IN THE PRESENT CASE ALSO THERE IS NO DISPUTE ABOUT THE FAC T THAT THE GIFT WAS MADE PURSUANT TO A FAMILY SETTLEMENT WHICH IS ACCEPTED BY LD. CIT(A) IN HIS ORDER AND THEREFORE TH E SAID TRANSFER OF PROPERTY AT TITAN HOUSE TO THE ASSESSEE COULD NOT BE SAID TO BE WITHOUT CONSIDERATION TO ATTRACT RIGO ROUS OF SECTION 56(2)(VII)(B) OF THE ACT AS THE SAME WAS DO NE AS A PART OF THEIR FAMILY SETTLEMENT. THE LD. A.R. FINALL Y SUBMITTED THAT THE REVENUE OFFICERS ARE NOT AUTHORISED AND EM POWERED TO DECIDE UPON THE LEGALITY OR VALIDITY OF DOCUMENTS T RANSFERRING THE TITLE OF THE PROPERTY AND THEREFORE IT WAS NOT OPEN TO AO AS WELL AS CIT(A) TO HOLD THAT THE GIFT DEED WAS INVAL ID. BESIDES, THE LD. COUNSEL VEHEMENTLY COUNTERING THE LD. CIT(A) S OBSERVATION HOLDING THE GIFT DEED DATED 16.08.2009 AS VOID/INVALID ON THE GROUND THAT IT DOES NOT MENTION THE DATE WHICH IT WAS EXECUTED IS FACTUALLY INCORRECT AS TH E DATE OF EXECUTION WAS MENTIONED IN THE STARTING LINE OF THE FIRST PARA THAT THE GIFT DEED WAS ENTERED INTO ON 16.08.2009. FINALLY, THE LD. A.R. CONTENDED THAT THE AO AS WELL AS THE LD . CIT(A) ACCEPTED THE SAID TRANSACTION IN THE HANDS OF THE D ONOR AND THE OTHER RECIPIENT I.E. THE SISTER-IN-LAW OF THE AS SESSEE, HOWEVER, THE SAME WAS NOT ACCEPTED IN THE HANDS OF T HE ASSESSEE AND THUS THE DIFFERENT TREATMENT OF A SIM ILAR TYPE OF ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 9 TRANSACTION IS TOTALLY WRONG, UNJUST AND ARBITRARY. IN DEFENCE OF HIS ARGUMENT, THE LD. A.R. RELIED ON THE DECISION O F UOI VS. KAMUDINI N. DALAL (2001) 249 ITR 219 (SC), CIT VS. S MT. VEENA G. SHROFF ITXA 71 OF 2013 (BOMBAY HC). FINALLY THE LD AR PRAYED THAT THE ADDITION SUSTAINED SHOULD BE DEL ETED. 8. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDE R OF AUTHORITIES BELOW AND SUBMITTED THAT THE ORIGINAL D EED DATED 16.08.2009 WAS ENTERED INTO IN ORDER TO CIRCUMVENT TH E TAX LIABILITY AND THE PROVISION OF SECTION 56(2)(VI)(B) OF THE ACT. THE LD DR CONTENDED THAT THE GIFT WAS ACTUALLY MADE ON 13.09.2011 WHEN THE GIFT DEED WAS ACTUALLY REGISTERED AND RELIED ON THE ORDER OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDER AND VARIOUS DECISIONS CITED BY THE L D. A.R. IN THE PRESENT CASE THE UNDISPUTED FACTS ARE THAT THER E WAS JOINT FAMILY DOING BUSINESS TOGETHER AND ALSO THE PROPERT IES WERE JOINTLY OWNED BY FATHER IN LAW OF THE ASSESSEE, SHR I BHAILAL SHAH AND HIS BROTHER SHRI VIRENDRA SHAH. WITH THE AGING OF BOTH THE BROTHERS THE NEW GENERATION WAS TO STEP IN TO THE BUSINESS AND THEREFORE THE FAMILY SETTLEMENT AND SE PARATION WAS STARTED FROM 2009 AND FINALLY COMPLETED IN 20 12. AS A PART OF THE FAMILY SETTLEMENT, A GIFT WAS ENTERED I NTO BETWEEN THE AUNT-IN-LAW SMT. RANJANA VIRENDRA SHAH GIFTING HER RIGHTS/SHARE IN THE TITAN HOUSE PROPERTY TO THE ASS ESSEE AND HIS SISTER IN LAW EQUALLY WHICH WAS RENTED OUT TO A NOTHER GROUP CONCERN M/S. TITAN LABORATORIES P. LTD IMMEDIATELY T HEREAFTER. ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 10 THE SAID GIFT DEED WAS EXECUTED ON NON JUDICIAL STA MP PAPER OF RS.100/- EACH DATED 12.08.2009 DULY WITNESSED AND N OT ARISEN BUT WAS NOT REGISTERED. SUBSEQUENTLY, ANOTH ER GIFT DEED WAS EXECUTED AND REGISTERED ON 13.09.2011 WITH S AME TERMS AS WERE CONTAINED IN THE ORIGINAL GIFT DEED D ATED 16.08.2009 BETWEEN THE SAME PARTIES WITH THE SAME SUB JECT MATTER. NOW THE CONTENTIONS OF THE AO IS THAT THE G IFT IS EFFECTIVE FROM THE 13.09.2011 WHEN THE GIFT DEED WAS REGISTERED AND NOT FROM 16.08.2009 WHEN THE GIFT DE ED WAS MADE BUT NOT REGISTERED AND WAS EXECUTED ON A NON R EGISTERED STAMP PAPER. ACCORDINGLY TO THE AO THE WITNESSES IN THE GIFT DEED WERE ALSO FROM AMONGST THE FAMILY MEMBERS. 10. NOW THE ISSUE BEFORE US IS WHETHER THE GIFT DEE D DATED 16.08.2009 IS VALID OR NOT. THE LD. CIT(A) HAS TREATE D THE GIFT DEED DATED 16.08.2009 AS INVALID FOR TWO REASONS. O NE IS THAT THE GIFT DEED IS NOT DATED AND SECOND THE WITNESSES ARE CLOSE RELATIVES OF THE ASSESSEE. IN OUR OPINION SUCH OBJE CTION BY THE TAX AUTHORITIES ARE WITHOUT ANY CONCRETE BASIS AS T HE FIRST APPELLATE AUTHORITY HAS FAILED TO PROVE ANY FALSITY OR OTHER DEFICIENCY IN THE SAID GIFT DEED. WE PERUSED THE SA ID DOCUMENT CAREFULLY AND FIND THAT IT WAS DULY DATED IN THE FIRST PARA WHICH COMMENCED WITH THE WORDS THAT THIS DEE D OF GIFT WAS MADE ON THIS 16 TH DAY OF AUGUST 2009 BETWEEN SO ON.. SO WE DO NOT SUBSCRIBE OR CONCUR TO THE CONCLUSION DRAWN BY THE LD. CIT(A) THAT THE GIFT DEED IS UNDATED AS SAME IS WRONG AND AGAINST THE FACTS ON RECORD. SO FAR AS THE SIGN ING IN PLACE OF THE WITNESSES BY THE TWO CLOSE FAMILY RELATIVES IS CONCERNED, THE SAME CAN NOT BE A BASIS FOR SUSPICIOUS THAT DEE D IS INVALID. ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 11 SO WE ARE NOT IN AGREEMENT WITH THE CONCLUSION OF L D. CIT(A) THAT GIFT DEED IS INVALID AND THAT THE GIFT WAS EF FECTIVE FROM 13.09.2011 WHEN THE GIFT DEED WAS REGISTERED. ANOTHE R SIGNIFICANT FACT IS THAT THE REVENUE AUTHORITIES HA VE ACCEPTED THE GIFT VIDE THE SAME DOCUMENT IN THE HAND OF THE DONOR AND ALSO IN THE HAND OF ANOTHER CO-DONEE SISTER-IN-LAW OF THE ASSESSEE. IN OTHER WORDS THE GIFT WAS MADE IN FAVO UR OF TWO PERSONS BY THE DONOR MRS. RANJANA VIRENDRA SHAH AUN T-IN-LAW OF THE ASSESSEE GIFTING 50% SHARE IN THE SAID PROPE RTY IN FAVOUR OF THE ASSESSEE AND 50% IN FAVOUR OF HER SIS TER IN LAW. NOW IT IS STRANGE TO NOTE THAT THE GIFT IS DULY ACC EPTED IN THE HAND OF SISTER-IN-LAW BY TAKING THE GIFT DEED AS GE NUINE WHEREAS THE SAME IS NOT ACCEPTED IN THE HAND OF THE ASSESSEE. WE ALSO FIND MERIT IN THE ARGUMENTS OF THE LD. A.R. THAT WHEN A DOCUMENT IS REGISTERED IT ACTS RETROSPECTIVELY FR OM THE DATE WHEN IT WAS ACCEPTED OR ACTED UPON BY THE AUTHORITI ES. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THE GI FT IN THE HAND OF THE ASSESSEE IS VALID GIFT VIDE GIFT DEED D ATED 16.08.2009 AND NOT BY THE SUBSEQUENT DATE AS HELD BY THE AUTHORITIES BELOW. ACCORDINGLY, WE SET ASIDE THE OR DER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30.08.2018. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30.08.2018. * KISHORE, SR. P.S. ITA NO.4205/M/2016 KUMARI HIROMI DEEPAK SHAH 12 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.