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TMI Blog2018 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances will not constitute a gift if the same is in pursuance of a family settlement? 2. Brief facts are that the assessee purchased 17,90,700 shares of M/s Bharat Hotels Limited at `25.70 per share. Purchase was from different companies controlled by family members as well as individuals, who formed part of the family. Apparently, a family dispute with respect to the control of the company M/s Bharat Hotels Limited and other properties was pending on the file of this Court in (Suit No. 516/1998). The share transfers were made pursuant to a family settlement arrived at by the disputing parties. The purchase was made by Sh. Ramesh Suri from the companies controlled by his brother G. Sagar Suri. Some shares were purchased from immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other such arrangement and that being a fiscal statute it should be construed on its terms strictly. 5. Learned counsel for the assessee, on the other hand, submitted that Ziauddin Ahmed (supra) squarely applies to this case since in similar circumstances in that case, certain shares were transferred pursuant to a family settlement, and it was held that the provisions of the Gift Tax Act would not be attracted because such transfer or execution is in the interest of family peace and harmony, which is ensured through the settlement, and the value or consideration of that cannot be set down in exact terms. 6. Section 2(24) of the Gift Tax Act defines transfer of property as follows:- "(xxiv) "transfer of property" means any disposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worth, shall be deemed to be a gift made by such person;" Section 3 of the Gift Tax Act, 1958 is the charging provision. It brings to tax all gifts made, during any assessable period. Section 4 extends the provisions of the Act to transactions that ordinarily would not be covered, by the expression „gift'. This extended application of the Act as it were, to the extent it is relevant, reads as follows:- "Gifts to include certain transfers. 4.(1) For the purpose of this Act,- (a) where property is transferred otherwise than for adequate consideration, the amount by which the value of the property as on the date of the transfer and determined in the manner laid down in Schedule II exceeds the value of the consideration shall be deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd such agreed consideration for 425 shares belonging to the deceased-assessee was Rs. 3,00,050. Applying the observations of the Supreme Court in Ram Charan Das's case (supra), we find that the allocation of 425 shares in the tea estate concerned has been by way of family settlement and the transaction has been made bona fide to put an end to the dispute amongst the members of the family of the deceased-assessee and, therefore, this transaction is not a transfer. In order to bring a case within the scope of section 4(1)(a) of the Gift-tax Act, 1958, first there must be a transfer for consideration and such consideration must be found to have been inadequate consideration. That being the case, in our opinion, the provisions of Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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