TMI Blog2018 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court] - GTA 3/2006 - - - Dated:- 16-1-2018 - MR. S. RAVINDRA BHAT MR. R. K. GAUBA JJ. Appellant Through: Mr. Zoheb Hossain, Sr. Standing Counsel Respondent Through: Mr. Prakash Kumar, Adv. MR. S. RAVINDRA BHAT (ORAL) 1. In this appeal, the following questions of law arise for consideration:- (i) Whether a transaction involving transfer of shares can constitute a gift under section 2(xii) read with section 4 of the Gift Tax Act in cases where the price paid for such transfer is proved to be in excess of the actual market price of the shares so transferred? (ii) Whether the transfer in the above circumstances will not constitute a gift if the same is in pursuance of a family settlement? 2. Brief fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer holding that the transactions could not be characterized as a transfer that would attract the provisions of Section 4 of the Gift Tax Act. The ITAT endorsed this opinion, and also relied upon the judgment of the Gawahati High Court in Ziauddin Ahmed vs. Commissioner of Gift Tax, (1976) 102 ITR 253. 4. Learned counsel for the revenue urges that the excess amounts paid over and above the face value, as consideration for the transaction is, in fact, a gift and constitutes a taxable gift under Section 4(1)(a) of the Gift Tax Act. It was submitted that the Act makes no exception in the case of a family settlement or any other such arrangement and that being a fiscal statute it should be construed on its terms stri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson The expression gift is defined in Section 2(xii) and reads as follows:- (xii) gift means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money s worth, and includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section; Explanation.- A transfer of any building or part thereof referred to in clause (iii), clause (iiia) or clause (iiib) of section 27 of the Income-tax Act, by the person who is deemed under the said clause to be the owner thereof made voluntarily and without consideration in money or money s worth, shall be deemed to be a gift made by such person; Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Tax Act would not be applicable. In doing so, the High Court cited with approval the recitals of the concerned deed and also the judgments of the Supreme Court relevant to the issue. The Court went on to hold as follows:- From the findings of the Tribunal in the instant case as quoted herein-above, it is found that the allocation of 425 shares belonging to the deceased assessee was made by way of family arrangement to settle existing and future disputes regarding the shares in the two tea estates amongst the members of the family of the deceased assessee and it has also been found by the Tribunal that there was some arbitration and the shares were transferred at an agreed consideration and such agreed consideration for 425 shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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