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2024 (4) TMI 585 - AT - Income TaxAddition u/s 56(2)(vii)(b) - transfer under gift deed - execution of the gift deed in pursuant to the family settlement / arrangement - HELD THAT:- As it is settled proposition of law that to understand the terms of a document one has to look to the substance rather than the form of it if mere formal description is not conclusive, unless the context shows the intention of the parties. In the case in hand as evident from the relevant record the gift deed in question was executed in the process of family settlement arrangement and distribution of the assets between the parties and therefore, the nature of transactions has to be determined on the basis of the substance and the real and intent of the parties behind the transactions. As evident from the seized material itself that the land in question was very much part of the assets to be distributed and consequently part of the family settlement/arrangements. The execution of the gift deed in question is only to give effect to the settlement and distribution of the assets between the parties. Hence, it is only a document of transfer of title in the scheme of distribution of assets under the Settlement between the parties and not in the nature of gift. Therefore, the transfer of the land in question through gift deed ought to have been considered in the light of surrounding facts and circumstances of settlement of division of properties between two related families and not in isolation. As the land in question was very much part and parcel of the settlement between the parties therefore, was also subject matter of distribution of assets between the parties then it would not fall in the ambit of section 56(2)(vii)(b) of the Act as it is not a transfer without consideration rather it is a transactions of exchange of the assets under the family settlement arrangement and distribution of the assets between the parties. Accordingly, transactions of transfer of the land in question by execution of the gift deed dated 04.02.2017 is only in pursuant to the family settlement/arrangement and in exchange of distribution of assets between the parties and consequently the said transactions would not fall in the ambit of section 56(2)(vii)(b) - Appeal of the assessee is allowed.
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