TMI Blog1995 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... addressed to the Registrar, Delhi High Court, New Delhi, preferred a claim to the sale proceeds amounting to Rs. 6,45,000, lying with the Registrar, Delhi High Court, New Delhi, towards the recovery of outstanding demand against Shri J. C. Gupta, resident of 204, Ashutosh Building, 9th Floor, Napean Sea Road, Bombay, which has led to the filing of this E. A. No. 142 of 1989, under Order 21, rule 58 of the Code of Civil Procedure objecting to the attachment of the amount of Rs. 6,45,000. The objector is judgment debtor No. 1 (original defendant). It has been the say of the objector (judgment-debtor No. 1) that the objector was the absolute owner of the property by virtue of gift deed dated March 16, 1970, registered on January 18, 1981, in the office of the Sub-Registrar, Bombay ; that the said property was gifted to her by her mother-in-law, Smt. Shanti Devi, wife of Shri J. C. Gupta, who was the previous absolute owner of the property ; that the objector as an absolute owner had entered into an agreement for sale dated May 17, 1970, with Seth Narain Singh for a total consideration of Rs. 7,45,000. That Seth Narain Singh on July 28, 1972, filed a suit for specific performance aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the sale proceeds thereof belonged to the objector and the same has been wrongly attached and that the income-tax dues are against Mr. J. C. Gupta that the objector became the owner of the said property on March 16, 1970, by gift deed in her favour by her mother-in-law, Smt. Shanti Devi that she is the absolute owner and is entitled to the sale proceeds lying with the Registry of the High Court and that the objector is not liable for the tax dues payable by Mr. J. C. Gupta. As against this, it has been submitted by Mr. R. C. Pandey, counsel for the Income-tax Department, that Mr. J. C. Gupta on November 8, 1949, gifted the property to his wife, Smt. Shanti Devi Gupta; that this gift was never accepted by the Income-tax Department as Smt. Shanti Devi Gupta was merely a benami-holder/owner and that Mr. J. C. Gupta continued to be the real owner of the said property ; that till 1989, the objector, Smt. Usha Gupta, did not do anything and these objections are only in the year 1989 belatedly. That Rs. 27,15,000 was the income-tax liabilities in the year 1987 against Mr. J. C. Gupta. It is further contended that the provisions of the Benami Transactions (Prohibition) Act do not apply a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1978, and the effect of such orders have been given in her case and the refund of 1970-71 to 1974-75 years have been adjusted in the assessment year 1975-76. By this letter, the objector requested that the net wealth made may please be computed after due consideration of the above orders wherein the property has been deleted from her net wealth and which is now being assessed in the hands of her father-in-law, Mr. J. C. Gupta, who is the real owner of this property. In my opinion, this letter by the objector would go a great way in suggesting that the property in question even after the gifts of 1949 and 1970, respectively, remained the property of Mr. J. C. Gupta, the original owner thereof. On the objector's say, the property was excluded from the hands of Smt. Shanti Devi, her precedessor in title and the effect of this was also given for the assessment years 1970-71 to 1973-74 and the adjustment in the subsequent years and that the value of the property was also excluded from the net assessable wealth of the objector, Smt. Usha Gupta for the assessment years 1976-77 to 1978-79 and the objector herself requested that her net wealth may be computed after due consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In the case of R. Rajagopal Reddy v. Padmini Chandrasekharan [1995] 213 ITR 340 (SC), it has been held by the Supreme Court that : "where a statutory provision which is not expressly made retrospective by the Legislature seeks to affect vested rights and corresponding obligations of parties, such provision cannot be said to have any retrospective effect by necessary implication. That the Benami Transactions (Prohibition) Act cannot be treated as declaratory in nature. Section 4(1) is not retrospective and does not apply to pending proceedings. Section 4(1) has limited operation in pending cases. Section 3 is not retrospective". I am in respectful agreement with this proposition of law. In my humble opinion, the principle laid down in this decision would by of no application to the present case, since, the question here is not of retrospective or prospective effect of section 3, section 4(1) and (2) of the Act. In the case of Manmohanlal v. ITO [1987] 168 ITR 616 (SC) ; that it is settled by authority long accepted that tax can be recovered from an assessee only when it becomes a debt due from him and that it becomes a debt due when a notice of demand calling for payment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppears to have been held benami by the objector in trust or for the benefit of the defaulter, i.e., Mr. J. C. Gupta. One of the arguments advanced on behalf of the objector is that once the gift deed is executed and has been delivered to the donee the same cannot be revoked or questioned. As far as the principle of law is concerned, the same cannot be questioned and I am in agreement with the proposition of law that once the gift deed is executed and has been delivered to the donee, the donor cannot revoke the gift, even before its registration on the ground that the gift cannot be completed until the deed is registered. In the instant case, there is no question of the donor, Mr. J. C. Gupta, revoking the gift made in favour of Smt. Shanti Devi. The above principle would apply when the gift deed is sought to be revoked by the donor. That being not the position here, and also on the principle that the benami transaction, even by the registered document cannot affect the third party interest, the submission on behalf of the objector in this regard, does not deserve any consideration and for this reason the decision reported in T. V. Kalyanasundaram Pillai v. Karuppa Mooppanar, AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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