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TMI Blog2016 (5) TMI 1549X X X X Extracts X X X X X X X X Extracts X X X X ..... hat both the Assessee are an Individual. For the assessment year 2012-13, the assessee in respect of assessee viz. Shri T.T. Siddarth filed return of income on 29.08.2012 showing income from salaries Rs. 43,35,985/-, income from other sources Rs. 3,07,6751- and long term capitaL gains of Rs. 12,00,00,000/- and claimed exemption under Section 54F of Rs. 8 crores, and assessee viz. Shri Maya Varadarajan filed return of income on 29.08.2012 showing income from property Rs. 39,980/-, and long term capital gains of Rs. 3,00,09,084/- and claimed exemption under Section 54F of Rs. 36.99 crores. 3.2 During the course of assessment proceedings, the AO found that the assessee had been gifted trade mark by Mrs Malathi Rangaswami and Mr TT Varadarajan by deed of settlement dated 19.12.2010. The capital asset being trademark was settled without any consideration of any money or money's worth and was transferred out of natural love and affection for the assessee. The assèssee claimed exemption under Section 49(1)(ii) since the period during which the previous owners held the right over the Trade mark was also to be considered for deciding whether the asset is of tong term, The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable properties and has been defined under Section 2 (24) of the Indian Stamp Act. As per the Indian Stamp Act a settlement deed is a non-testamentary disposition, in writing, of movable or immovable property made - a) in consideration of marriage, b) for the purpose of distributing properties of Settler among his family or those for whom he desires to provide for, or for the purpose of providing for some person dependent on him, or c) for any religious or charitable purposes; 3.4 However, as per the Indian law there is a marked difference between a settlement and other instruments used for conveyance of a property. The distinction between settlement and other related instruments is as follows. Trust v/s settlement A settlement deed should not be mistaken for a trust deed In case of trust, the author vests the property in favour of its trustees, who manage, and administer the property /properties as per the direction of the author for the benefit of third person/s called beneficiaries. The trustees will act only as per the directions of the author of a trust deed and the beneficiaries do not have any say in the management of the said properties. However, in settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seen from the above, that there are striking differences between a settlement and a gift. Under no circumstances can a settlement be equated to a gift. The appellant's contention of importing the definition of gift from the Gift Tax Act, 1958, which is no longer in existence, is not a valid proposition. 3.6 Having come to a decision that a settlement is not a gift under the prevalent law, the next issue to be resolved is whether the capital asset is a Long Term Capital Asset or a Short Term Capital Asset under the Income Tax Act. The relevant part of the section 49 of the Income Tax Act reads as under: Cost with reference to certain modes of acquisition. "49. [(1)] Where the capital asset became the property of the assessee- (i) on any distribution of assets on the total or partial partition of a Hindu undivided family; (ii) under a gift or will; (iii) (a) by succession, inheritance or devolution, or [(b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of April, 1987, or] (c) on any distribution of assets on the liquidation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits there under have been rightly denied to the assessee by the Assessing Officer. Accordingly, the appeal of the assessee is dismissed. Against this, the assessee is in appeal before us. 4.1 We have heard both the parties and perused the material on record. The main contention of the ld.A.R is that there is no difference between Gift and Settlement and the Explanation-1(i)(b) to Sec.2(42A) r.w.s.49(1)(ii) of the Act is applicable. As such while computing the period of holding capital assets, the period of holding all that asset by the previous owner to be considered. According to him, once we consider the the period of holding of previous owner of the impugned capital asset, then the holding period byte present assessee is more than three years and which resulted in computation of long term capital gains and consequently, the assessee is entitled for deduction u/s.54F of the Act. For this purpose he has relied on the order of Tribunal in the case of ITO Vs. Shri Abdul Hameed Khan Mohammed,Chennai in ITA No.1782/Mds./2015 for assessment year 2011-12 vide order dated 29.12.2015. We find force in the argument of the ld.A.R. In these two cases, the assets got the right, title a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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