Shri Ramniklal M. Sheladia, Ahmedabad V. The ACIT, Central Circle-1(4), Ahmedabad

ITSSA 376/AHD/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2445 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 24-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Assessee Lawyers: T P HEMANI; P B PARMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 142(1); 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ IT(SS)A.NO.376/AHD/2013 / ASSTT. YEAR: 2011-12 SHRI RAMNIKLAL M. SHELADIA 390-B, SATYAGRAH CHHAVNI SATELLITE, AHMEDABAD. PAN : ADRPS 2492 Q. VS. ACIT, CENT.CIR.1(4) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI T.P. HEMANI & SHRI P.B. PARMAR, AR REVENUE BY : SHRI JAGDISH, CIT-DR / DATE OF HEARING : 06/10/2016 / DATE OF PRONOUNCEMENT: 25/11/2016 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST T HE ORDER OF THE LD.CIT(A)-I, AHMEDABAD PASSED FOR THE ASSTT.YEAR 20 11-12. 2. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES , 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF THE ASSESSEE IS THAT LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.43,35,392/- WHICH WAS ADDED BY THE AO WITH THE A ID OF SECTION 50C OF THE INCOME TAX ACT, 1961. IT(SS)A NO.376/AHD/2013 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE BE LONGS TO SHELADIA GROUP. SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 196 1 WAS CARRIED OUT ON 14.12.2010 IN THE CASE OF SHELADIA GROUP BASED AT A HMEDABAD AND ALSO PATEL FAMILY GROUP BASED AT GANDHINAGAR. THE ASSESSEE WA S ALSO COVERED UNDER SEARCH OPERATION. IN RESPONSE TO THE NOTICE, THE A SSESSEE HAS FILED RETURN OF INCOME UNDER SECTION 139(1) ON 28.9.2011 DECLARING TOTAL INCOME AT RS.22,84,59,830/-. A NOTICE UNDER SECTION 143(2) W AS ISSUED ON 31.8.2012 AND THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO MAKE S UBMISSIONS AND PRODUCE MATERIAL IN SUPPORT OF HIS RETURN OF INCOME. SUBSE QUENTLY, NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED. DURING THE C OURSE OF SCRUTINY ASSESSMENT IT CAME TO THE NOTICE OF THE AO THAT THE ASSESSEE HAD PURCHASED LAND AT VASTRAPUR, BEARING FINAL PLOT NO.140 OF TP SCHEME NO.1, CITY SURVEY NO.683. THIS PIECE OF LAND WAS PURCHASED BY THE AS SESSEE ON 15.11.2016 AT COST OF RS.48,45,550/- WHICH INCLUDED STAMP DUTY AN D OTHER EXPENSES. THE ASSESSEE THEREAFTER INCURRED RS.9,79,565/- AS PAYME NT TO AUDA ON 3.7.2008. HE HAS SOLD THIS PLOT BY WAY OF FIVE SEPARATE SALE DEEDS ON 29.3.2011. THE LD.AO HAS CALLED FOR DETAILS OF SALE DEED FROM THE SUB-REGISTRAR, AHMEDABAD- 3. A PERUSAL OF THE SALE DEEDS INDICATE THAT THE T OTAL SALE VALUE SHOWN BY THE ASSESSEE IN THE SALE DEED WAS RS.58,23,515/- WHEREA S THE VALUE OF PLOT ADOPTED BY THE STAMP DUTY VALUATION AUTHORITY FOR T HE PURPOSE OF PAYMENT OF STAMP DUTY WAS RS.1,21,70,200/-. THE DETAILS HAVE BEEN NOTICED BY THE AO ON PAGE NO.10 OF THE ASSESSMENT ORDER. THEY READ A S UNDER: SR. NO. REG. NO. SALE VALUE AS PER DOCUMENT MARKET VALUE AS PER JANTRI DIFFERENCE 01. AHD-3-MGR-4016 8,15,515 17,03,800 8,88,285 02. AHD-3-MGR-4014 7,56,465 15,82,100 8,25,635 03. AHD-3-MGR-4017 7,56,465 15,82,100 8,25,635 IT(SS)A NO.376/AHD/2013 3 04. AHD-3-MGR-4011 17,47,535 36,51,100 1903565 05. AHD-3-MGR-4019 17,47,535 36,51,100 1903565 58,23,515 1,21,70,200 63,46,685 4. BY WAY OF FINANCE ACT, 2002 W.E.F. 2003, SECTION 50C HAS BEEN INSERTED VIDE FINANCE ACT, 2002 W.E.F. 1.4.2003. T HIS SECTION CONTEMPLATES THAT WHERE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOV ERNMENT, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFE R, THE VALUE SO ADOPTED OR ASSESSED SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESU LT OF SUCH TRANSFER. SINCE THERE WAS A DIFFERENCE BETWEEN VALUE ON WHICH THE S TAMP DUTY WAS PAID VIS-- VIS ACTUAL SALE CONSIDERATION DISCLOSED BY THE ASSE SSEE, THE LD.AO HAS CONFRONTED THE ASSESSEE AS TO WHY THIS DIFFERENCE B E NOT ADDED IN THE TOTAL INCOME OF THE ASSESSEE. IN OTHER WORDS, THE LD.AO HAS CONFRONTED THE ASSESSEE AS TO WHY FULL SALE CONSIDERATION SHOULD NOT BE REP LACED BY THE FIGURE ON WHICH STAMP DUTY WAS PAID. THE DETAILS OF SHOW CAU SE NOTICE ISSUED BY THE AO ON PAGE NO.10-11 OF THE ASSESSMENT ORDER. IN RE SPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAS GIVEN FOLLOWING REPLY: '1. THE LAND AT CITY SURVEY NO. 683 WAS PURCHASED B Y RAMNIKBHAI M. SHELADIA ON 15-11-2006 AT RS. 45 LACS AND INCURRED STAMP DUTY & REGISTRATION EXPENSES OF RS.345,550/-, COPY OF LEDG ER A/C ALONG WITH COPY OF PURCHASED DEED FURNISHED EXB-1. FOR COMMERC IAL CONSTRUCTION ON THIS LAND, AUDA CHARGES OF RS.979,565/- WERE PAI D ON 03-07-2008, COPY OF A/C WITH RECEIPT FURNISHED EXB-2. 2. IN THE YEAR 2010-11, CONSTRUCTION WAS STARTED AN D RS.35,95,402/- WERE INCURRED, A/C COPY OF CONSTRUCTION EXPENSES FU RNISHED EXB-3. IT(SS)A NO.376/AHD/2013 4 3. AFTER SEARCH, THERE WAS DISPUTE BETWEEN FAMILY M EMBERS OF RAMNIKBHAI M. SHELADIA AND BABUBHAI M. SHELADIA. TO RESOLVE THE DISPUTE, IT WAS DECIDED THAT LAND AT SURVEY NO. 683 IS OF JOINT FAMILY PROPERTY AND DOCUMENT WAS REGISTERED IN THE NAME OF RAMNIKBHAI M. SHELADIA, THE LAND WAS DISTRIBUTED AMONG ABOVE PERS ONS AS FAMILY SETTLEMENT BETWEEN TWO BROTHERS FAMILY AND TO GIVE EFFECT TO SUCH INTENTION THE SALE DEEDS WERE EXECUTED IN THE FAMIL Y MEMBERS NAME. 4. TO GIVE EFFECT TO THE FAMILY SETTLEMENT, THE DOC UMENTS FOR UNDIVIDED PORTION OF LAND WERE EXECUTED IN THE NAME OF VARIOU S FAMILY MEMBERS, AT COST I.E. AT BOOK VALUE, AS TO ENTER THE NAME IN THE LAND RECORDS, IT IS MUST TO EXECUTE REGISTERED DOCUMENT, THEREFORE, THE DOCUMENTS WERE EXECUTED AT BOOKS PRICE, IRRESPECTIVE OFJANTRI VALU E, THE DETAILS OF DOCUMENTS EXECUTED ARE AS UNDER. 5. IT IS SUBMITTED THAT SUCH LAND IS TRANSFERRED AT BOOK VALUE AS A PRT OF FAMILY SETTLEMENT, AS MENTIONED IN THE DEED ITSELF ON PAGE NO.9 OF SALE DEEDS, THEJANTRI VALUE IS MERELY FOR THE PURPOSE OF PAYING STAMP DUTY TO THE STATE GOVERNMENT. THE SETTLEMENT HAS TAKEN PLAC E BETWEEN FAMILY MEMBERS OF TWO BROTHERS AND AS A RESULT, THE LAND I S TRANSFERRED IN THE NAME OF FAMILY MEMBERS. 5. THE LD.AO WAS NOT SATISFIED WITH THE CONTENTIONS OF THE ASSESSEE. HE HELD THAT A TRANSFER HAS TAKEN PLACE, AND THE ASSES SEE IS REQUIRED TO PAY LONG TERM CAPITAL GAIN ON TRANSFER OF THIS CAPITAL ASSET . THE LD.AO HAS MADE AN ADDITION OF RS.43,35,392/- IN THE TOTAL INCOME OF T HE ASSESSEE. THE COMPUTATION MADE BY THE AO READS AS UNDER: SALE CONSIDERATION AS STAMP VALUE RS.1,21,70,200/- LESS: INDEXED COST OF PURCHASE (4845550 X 711/519) RS.66,38,123 INDEX COST OF IMPROVEMENT (979565 X 711/582 RS.11,96,685 RS.78,34,808/- LONG TERM CAPITAL GAIN RS.43,35,392/- IT(SS)A NO.376/AHD/2013 5 6. ON APPEAL, THE ASSESSEE HAS REITERATED HIS CONTE NTIONS AS WERE RAISED BEFORE THELD.CIT(A). THE LD.CIT(A) HAS ALSO REJEC TED THE CONTENTIONS OF THE ASSESSEE BY OBSERVING AS UNDER: 8. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE A.R. CAREFULLY. DURING THE YEAR APPELLANT HAS TRANS FERRED LAND AT SURVEY NO. 683 TO VARIOUS MEMBERS OF SHELADIA FAMILY AT RS . 58,23,515/- I.E. AT COST. THE AR OF THE APPELLANT STATED THAT THE SA ID TRANSFER HAS TAKEN PLACE AS A RESULT OF FAMILY SETTLEMENT AND THERE IS NO CAPITAL GAIN IN SUCH TRANSFER. IN SUPPORT OF THE ABOVE CONTENTION T HE AR OF THE APPELLANT RELIED ON SEVERAL CASE LAWS WHICH STATE T HAT IF THE ASSETS ARE TRANSFERRED WITHIN THE FAMILY IN ORDER TO ARRIVE AT ON SETTLEMENT THEN SUCH TRANSFERS OF ASSETS SHALL NOT BE DEEMED AS TRA NSFER FOR THE PURPOSE OF CAPITAL GAINS. HOWEVER, THE A.O. DID NOT ACCEPT THIS CONTENTION AND HELD THAT THE GAIN RESULTING FROM THE TRANSFER OF L AND TO FAMILY MEMBERS WAS CHARGEABLE TO TAX AS CAPITAL GAINS. AS PER THE AO PROVISIONS OF SECTION 50C OF THE ACT WERE APPLICABLE TO THIS CASE . TAKING THE SALE CONSIDERATION AS PER STAMP DUTY VALUATION (JANTRI R ATE) AT RS. 1,21,70,2007- THE AO WORKED OUT LONG-TERM CAPITAL G AIN AT RS. 43,35,3927-. SINCE, THE CAPITAL GAIN WAS NOT OFFERE D IN I.T. RETURN FILED, THE AO TREATED THE SAME AS UNDISCLOSED INCOME OF TH E APPELLANT. 8.1 IT IS SEEN THAT THE APPELLANT STATED THAT SUCH LAND IS TRANSFERRED AT BOOK VALUE AS A PART OF FAMILY SETTLEMENT. THE AR O F THE APPELLANT REFERRED TO THE REGISTERED DEED FOR TRANSFER OF THI S LAND TO CLAIM THAT THE TRANSFER WAS AS A RESULT OF FAMILY SETTLEMENT BECAU SE SUCH NARRATION ABOUT FAMILY SETTLEMENT IS MENTIONED ON PAGE NO. 9 OF SALE DEED. IT WAS ALSO ARGUED THAT THE LAND IS TRANSFERRED AS A RESUL T OF FAMILY SETTLEMENT, THERE IS NO CAPITAL GAIN OR LOSS, AS THE TRANSACTIO NS ARE NOT IN THE NATURE OF SALE OF LAND. THE DOCUMENTS ARE EXECUTED FOR THE PURPOSE OF ENTRY IN THE REVENUE RECORDS. 8.2 THE A.R. OF THE APPELLANT FURTHER ARGUED THAT F AMILY SETTLEMENT DOES NOT AMOUNTS TO TRANSFER, HENCE, THERE IS NO CAPITAL GAIN AND CONSEQUENTLY NO CAPITAL GAIN TAX U/S. 45(1) OF THE ACT AND SUBMITTED THAT FAMILY SETTLEMENT IS NOT A TRANSFER IN THE EYE OF LAW, AS HELD BY HON'BLE COURTS THAT THE FAMILY SETTLEMENT OR ARRANG EMENTS DO NOT GIVE RISE TO ANY LIABILITY TO CAPITAL GAINS TAX AS HELD IN CIT VS. R. PONNAMMAL (1986) 54 CTR (MAD) 319 : (1987) 164 ITR 706 (MAD), CIT VS. AL. RAMANATHAN (2000) 159 CTR (MAD) 255 : ( 2000) 245 ITR 494 (MAD), CIT VS. KAY AAR ENTERPRISES (2008) 299 I TR 348 (MAD) AND IT(SS)A NO.376/AHD/2013 6 CIT VS. R. NAGARAJA RAO (2012) 207 TAXMAN 74 (KAR). THE AR OF THE APPELLANT FURTHER ARGUED THAT THE REGISTRATION OF I MMOVABLE PROPERTIES ARE PART OF FAMILY SETTLEMENT AND TO GIVE BETTER TI TLE TO THE BENEFICIARIES IT DOES NOT AMOUNTS TO TRANSFER; HENCE THERE IS NO CAPITAL GAIN AND CONSEQUENTLY NO CAPITAL GAIN TAX U/S. 50C OF THE AC T. 8.3 I HAVE EXAMINED THE CASE LAWS RELIED UPON BY TH E AR OF THE APPELLANT AS ALSO THE FACTS OF THIS CASE. IT IS SET TLED LAW THAT A PARTITION IN A FAMILY IS NOT A TRANSFER. THE COURTS HAVE ALSO HELD THAT TRANSFER OF ASSETS WITHIN THE FAMILY TO GIVE EFFECT TO FAMILY S ETTLEMENT IS NOT TRANSFER. IT IS ALSO SEEN THAT IN THE REGISTERED DE ED, IT HAS BEEN RECORDED THAT THE IMMOVABLE PROPERTY IS TRANSFERRED AMONGST FAMILY MEMBERS AS A RESULT OF FAMILY SETTLEMENT. HOWEVER A CLOSE LOOK AT THE FACTS CLEARLY INDICATES THAT THE ACTUAL SITUATION IS COMPLETELY D IFFERENT. THE LAND IN QUESTION WAS PURCHASED BY THE APPELLANT OUT OF HIS OWN RESOURCES. THE ASSET BELONGS SOLELY TO THE APPELLANT. THE AR OF TH E APPELLANT WAS ASKED TO ADDUCE EVIDENCE IN SUPPORT OF HIS CLAIM THAT THE ASSET BELONGED TO THE FAMILY MEMBERS JOINTLY. THE AR OF THE APPELLANT EXPRESSED HIS INABILITY IN FURNISHING ANY SUCH EVIDENCE. HE FAIRL Y CONCEDED THAT THE ASSET HAD BEEN PURCHASED OUT OF PERSONAL FUNDS OF T HE APPELLANT. ONCE IT IS ESTABLISHED THAT THE LAND WAS ACQUIRED BY THE APPELLANT OUT HIS OWN FUNDS THEN THE SAME CANNOT BE REGARDED AS FAMILY PR OPERTY. IN SUCH A SITUATION, THERE CAN BE NO DISPUTE ABOUT OWNERSHIP OF THE LAND. THEREFORE, IT CANNOT BE ARGUED THAT TRANSFER OF SUC H LAND TO OTHER FAMILY MEMBERS IS FOR THE PURPOSE OF FAMILY SETTLEMENT LIK E PARTITION. IN THE EYES OF LAW, PARTITION IS ONLY OF ASSETS WHICH ARE JOINTLY HELD. IF THE ASSETS ARE HELD IN INDIVIDUAL NAMES THEN TRANSFER O F SUCH ASSETS TO OTHER FAMILY MEMBERS CAN ONLY BE CALLED PARTITION IF IT I S ESTABLISHED THAT THE ASSET IN QUESTION WAS ACQUIRED OUT OF JOINT FUNDS O F THE FAMILY. AS ALREADY INDICATED ABOVE, THE AR OF THE APPELLANT HA S STATED THAT THE LAND WAS ACQUIRED BY THE APPELLANT OUT OF HIS OWN F UNDS, HENCE THE TRANSFER OF THIS LAND CANNOT BE CALLED A PARTITION BY ANY STRETCH OF IMAGINATION. MERE RECORDING IN THE REGISTERED DEED THAT THE DEED WAS BEING REGISTERED TO IMPROVE THE TITLE WOULD NOT ALT ER THE TRUE NATURE OF THE TRANSACTION. IT IS ALSO SEEN THAT THE APPELLANT HAS RECEIVED CONSIDERATION FOR THIS TRANSFER FROM FAMILY MEMBERS . THIS CLEARLY PROVES THAT THIS TRANSFER IS ONLY A CASE OF SALE OF ASSET TO FAMILY MEMBERS AND NOT A PARTITION BECAUSE IF THE LAND HAD BEEN ACQUIRED BY THE APPELLANT WITH THE COMBINED FUNDS OF THE FAMILY THEN THERE WOULD BE NO OCCASION TO CHARGE ANY CONSIDERATION FOR THE TRA NSFER WHICH WAS BEING EFFECTED ONLY TO BRING CLARITY TO THE TITLE. IT(SS)A NO.376/AHD/2013 7 8.4 THUS IT IS CLEAR THAT THE CONTENTION OF THE AR OF THE APPELLANT THAT THE TRANSFER WAS FOR THE PURPOSE OF FAMILY SETTLEME NT IS NOT CORRECT AND CANNOT BE ACCEPTED. IT IS ALSO CLEAR THAT THE TRANS FER WAS EFFECTED AT COST ONLY TO EVADE THE CAPITAL GAINS CHARGEABLE ON THESE TRANSFERS. MERE RECORDING BY CONSENTING PARTIES WOULD NOT ALTER THE TRUE NATURE OF TRANSACTION. WHEN THERE IS TRANSFER AND CAPITAL GAI N IS CHARGEABLE THEN PROVISIONS OF SECTION 50C OF THE ACT ARE CLEARLY AP PLICABLE. IN VIEW OF THE ABOVE, ADDITION OF CAPITAL GAIN UNDE R THE PROVISIONS OF SECTION 50C MADE BY A.O. OF RS. 43,35,3927- IS JUST IFIED. 7. BEFORE US, WHILE IMPUGNING THE ORDERS OF THE REV ENUE AUTHORITIES, THE LD.COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT BASI CALLY THERE WAS NO TRANSFER OF LAND AT THE END OF THE ASSESSEE. THE DISPUTE AM ONGST THE FAMILY MEMBERS WAS RESOLVED BY WAY OF A FAMILY SETTLEMENT AND IN O RDER TO GIVE EFFECT TO SUCH FAMILY SETTLEMENT IN THE REVENUE RECORD, SALE DEEDS HAVE BEEN REGISTERED. IN REALITY THERE WAS NO TRANSFER. THE LD.COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TOWARDS PAGE NO.17 OF THE PAPER BOOK, WHE RE FAMILY TREE/PEDIGREE TABLE HAS BEEN GIVEN. IT HAS BEEN POINTED THAT SHR I MEGHJIBHAI SHELADIA AND SMT. VALUBEN SHELADIA HAS SON, VIZ. SHRI BABUBHAI M EGHJI SHELAIDA AND RAMNIKBHAI MEGHJIBHAI SHELADIA. RAMNIKBHAI MEGHJI SHELADIA HAS ARE SON SHRI AKSHAY RAMNIBHAI SHELADIA, WHEREAS SHRI BABUBH AI MEGHJIBHAI SHELADIA HAS TWO SONS VIS. SHRI TUSHAR BABUBHAI SHE LADIA AND CHIRAG BABUBHAI SHELADIA. PROPERTIES HAVE BEEN GIVEN BY S HRI RAMNIKBHAI MEGHJIBHAI SHELADIA TO SHRI TUSHAR BABUBHAI SHELADI A AND SHRI CHIRAG BABUBHAI SHELADIA, I.E. NEPHEWS. ON THE STRENGTH O F HONBLE SUPREME COURT DECISION IN THE CASE OF KALE AND OTHERS VS. DY. DIR ECTOR OF CONSOLIDATION AND OTHERS, (1976) 3 SCC 119, IT HAS BEEN CONTENDED THA T DISPUTE CAN BE SETTLED BY WAY OF FAMILY SETTLEMENT AND FAMILY SETTLEMENT C AN BE ORAL ALSO. THE ASSESSEE HAS NOT TRANSFER THE LAND, RATHER RELINQUI SHED HIS SHARES IN FAVOUR OF OTHER FAMILY MEMBERS, AND THEREFORE, SECTION 50C SH OULD NOT BE INVOKED. ON IT(SS)A NO.376/AHD/2013 8 THE OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE LD.REVENUE AUTHORITIES BELOW. 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ALL THESE CONTENTIONS HAVE BEEN RAISED BY THE ASSESSEE BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS CONSIDERED THE JUDGMEN T CITED BY THE ASSESSEE IN PARA 8.2 OF HIS FINDINGS WHICH HAVE BEEN EXTRACT ED (SUPRA). THE LD.CIT(A) HAS CONCURRED WITH THE PROPOSITION THAT TRANSFER OF ASSETS WITHIN THE FAMILY TO GIVE EFFECT TO THE FAMILY SETTLEMENT IS NOT TRANSFE R. IN OTHER WORDS, AS FAR AS THE PROPOSITION LAID DOWN IN THE JUDGMENT IS CONCER NED, THERE IS NO DISPUTE AT THE END OF THE LD.CIT(A). SIMILARLY, WE DO NOT HES ITATE IN ACCEPTING THIS PRINCIPLE THAT IF THE ASSETS HAVE BEEN TRANSFERRED WITHIN THE FAMILY TO GIVE EFFECT TO FAMILY SETTLEMENT, THEN IT CANNOT FALL WI THIN THE AMBIT OF TRANSFER AND SECTION 50C WOULD NOT BE INVOKED. BUT THE FACTS IN THE PRESENT CASE ARE THAT THERE WAS NO FAMILY SETTLEMENT AS SUCH. BEFORE ADV ERTING TO THE FACT IN MORE DETAILS, LET US TAKE NOTE OF BROAD PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT TO DEMONSTRATE ESSENTIAL ELEMENTS FOR FAMILY SETTLEMENT. THEY READ AS UNDER: 10. IN OTHER WORDS TO PUT THE BINDING EFFECT AND T HE ESSENTIALS OF A FAMILY SETTLEMENT IN A CONCRETISED FORM, THE MATTER MAY BE REDUCED INTO THE FORM OF THE FOLLOWING PROPOSITIONS : (1) THE FAMILY SETTLEMENT MUST BE A BONA FIDE ONE S O AS TO RESOLVE FAMILY DISPUTES AND RIVAL CLAIMS BY A FAIR AND EQUI TABLE DIVISION OR ALLOTMENT OF PROPERTIES BETWEEN THE VARIOUS MEMBERS OF THE FAMILY ; (2) THE SAID SETTLEMENT MUST BE VOLUNTARY AND SHOUL D NOT BE INDUCED BY FRAUD, COERCION OR UNDUE INFLUENCE ; (3) THE FAMILY ARRANGEMENT MAY BE EVEN ORAL IN WHIC H CASE NO REGIS- TRATION IS NECESSARY; (4) IT IS WELL-SETTLED THAT REGISTRATION WOULD BE N ECESSARY ONLY IF THE TERMS OF THE FAMILY ARRANGEMENT ARE REDUCED INTO WR ITING. HERE ALSO, A IT(SS)A NO.376/AHD/2013 9 DISTINCTION SHOULD BE MADE BETWEEN A DOCUMENT CONTA INING THE TERMS AND RECITALS OF A FAMILY ARRANGEMENT MADE UNDER THE DOCUMENT AND A MERE MEMORANDUM PREPARED AFTER THE FAMILY ARRANGEME NT HAD ALREADY BEEN MADE EITHER FOR THE PURPOSE OF THE RECORD OR F OR INFORMATION OF THE COURT FOR MAKING NECESSARY MUTATION. IN SUCH A CASE THE MEMORANDUM ITSELF DOES NOT CREATE OR EXTINGUISH ANY RIGHTS IN IMMOVABLE PROPERTIES AND THEREFORE DOES NOT FALL WITHIN THE MISCHIEF OF SECTION 17(2) OF THE REGISTRATION ACT AND IS, THEREFORE, NOT COMPULSORIL Y REGISTRABLE; (5) THE MEMBERS WHO MAY BE PARTIES TO THE FAMILY A RRANGEMENT MUST HAVE SOME ANTECEDENT TITLE, CLAIM OR INTEREST EVEN A POSSIBLE CLAIM IN THE PROPERTY WHICH IS ACKNOWLEDGED BY THE PARTIES T O THE SETTLEMENT. EVEN IF ONE OF THE PARTIES TO THE SETTLEMENT HAS NO TITLE BUT UNDER THE ARRANGEMENT THE OTHER PARTY RELINQUISHES ALL ITS CL AIMS OR TITLES IN FAVOUR OF SUCH A PERSON AND ACKNOWLEDGES HIM TO BE THE SOLE OWNER, THEN THE ANTECEDENT LITTLE MUST BE ASSUMED AND THE FAMILY ARRANGEMENT WILL BE UPHELD AND THE COURTS WILL FIND NO DIFFICUL TY IN GIVING ASSENT TO THE SAME ; (6) EVEN IF BONA FIDE DISPUTES, PRESENT OR POSSIBLE , WHICH MAY NOT INVOLVE LEGAL CLAIMS ARE SETTLED BY A BONA FIDE FAM ILY ARRANGEMENT WHICH IS FAIR AND EQUITABLE THE FAMILY ARRANGEMENT IS FINAL AND BINDING ON THE PARTIES TO THE SETTLEMENT. 9. A PERUSAL OF THE ABOVE PROPOSITION WOULD INDICAT E THAT ONE OF THE ESSENTIAL INGREDIENTS OF A FAMILY SETTLEMENT IS THE PARTIES HAVE PRE-EXISTING RIGHTS IN THE ASSETS WHOSE DISPUTE IS GOING TO BE S ETTLED. IN THE FIFTH PROPOSITION, IT HAS BEEN OBSERVED BY THE HONBLE SU PREME COURT THAT EVEN IN THE GIVEN CASE, ONE OF THE PARTIES TO THE SETTLEMEN T HAS NO TITLE, BUT UNDER ARRANGEMENT OTHER PARTY RELINQUISHES ITS CLAIM OR T ITLE IN FAVOUR OF SUCH PERSON AND ACKNOWLEDGE HIM TO BE SOLE OWNER, THEN ANTECEDE NTAL TILE MUST BE ASSUMED AND THE FAMILY ARRANGEMENT WILL BE UPHELD. IN OTHER WORDS, EVEN IF ONE OF THE PARTIES HAVE NO TITLE OR INTEREST, BUT O THER PARTIES RECOGNIZED HIS TITLE, THEN, IT IS TO BE ASSUMED THAT THE FIRST PAR TY HAD AN ANTECEDENTAL TITLE IN THAT PROPERTY. IN THE PRESENT CASE, THE LD.CIT(A) HAS DISCUSSED THE FACTS IN DETAIL, AND OBSERVED THAT THIS PIECE OF LAND WAS PU RCHASED BY THE ASSESSEE IN IT(SS)A NO.376/AHD/2013 10 2006 FROM HIS RESOURCES. HIS NEPHEWS HAVE NO RIGHT OR INTEREST IN THIS PIECE OF LAND. THE LAND WAS NOT PURCHASED FROM THE COMMO N FUND OF THE PARTIES. APART FROM THE ABOVE, A PERUSAL OF THE ASSESSEES R EPLY TO THE AO WOULD INDICATE THAT DISPUTE ABOUT THE PROPERTIES HAVE BEE N RAISED AFTER SEARCH, AND THEREAFTER, IT WAS DECIDED THAT THIS PROPERTY WILL BE TREATED AS JOINT FAMILY PROPERTY. WHAT WAS OTHER CONDITION FOR SUCH RESOLU TION IS NOWHERE DISCERNIBLE. THIS PROPERTY WAS PURCHASED BY THE AS SESSEE BY HIS INDEPENDENT FUND. NEPHEWS HAVE NO EXISTING RIGHT OR ANCESTRAL RIGHT, AND THEREFORE, THERE IS NO DISTRIBUTION OF ASSETS BY WAY OF FAMILY MEMBE RS. IT WAS A TRANSFER FOR COMMERCIAL CONSIDERATION. AS SUCH, THE LD.AO HAS R IGHTLY INVOKED SECTION 50C OF THE INCOME TAX ACT FOR COMPUTING THE CAPITAL GAIN TAXABLE IN THE HANDS OF THE ASSESSEE. WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE ASSESSEE. ACCORDINGLY, IT IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 25 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER