TMI Blog2024 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... bution 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized documents includes gift deed dated 04.02.2017 which is part of LPS-8 executed by Smt. Aditi Bhatiya in favour of the assessee Smt. Adita Asnani wife of Shri Vishan Das Asnani whereby a land bearing Khasra Numbers 291/1,294/2/2, 295/1 and 295/2 measuring about 1 hectare was transferred. Based on the said gift deed found and seized during the course of search and seizure operation the AO proposed to make an addition of Rs. 3,67,00,000/- u/s 56(2)(vii)(b) of the Act. The AO has passed composite assessment order u/s 153A for A.Y.2013-14 to 2018-19 and u/s 143(3) for A.Y.2019-20 whereby the AO inter alia made addition of Rs. 3,67,00,000/- for the year under consideration u/s 56(2)(vii)(b) of the Act. The assesse challenged the action of the AO before the CIT(A) but could not succeed. 3. Before the Tribunal ld. Sr. counsel has submitted that there was a family settlement arrangement between Shri Vishan Das Asnani and Shri OP Kriplani on 14.02.2015 which was found and seized at part of LPS-4. He has referred to the said family settlement arrangement placed at page no.26 27 of the paper book and submitted that the land in question bearing Khasra Numbers 291/1,294/2/2, 295/1 and 295 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lving Mr. OP Kriplani, the brother-in-law of Mr. Vishan Das Asnani. Therefore, the substance of the transaction ought to have been considered instead of form as reflected from the surrounding circumstances and relevant material seized during the course of search. To solidify a comprehensive family arrangement both the parties mutually reached a settlement on 14.02.2015 which clearly demonstrates the exchange of assets between them, substantiating the establishment of a settlement and the equitable distribution of the mentioned land between both the parties. The documents seized by the department during the course of search demonstrate the family arrangement between the parties which was available on record before the AO in the form of LPS-4 but the AO did not consider these relevant records while making addition in question. He has referred to LPS-4 at the page no.26 of the paper book and submitted that the land in question is part of this document which is in turn part of the family settlement and therefore, the transfer of the land in question was part and parcel of the family settlement/arrangement. The gift deed was executed because the land in question was registered in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd cataloged as LPS-6 , and the same was readily available on record before the Learned Assessing Officer (Ld. AO). The MOU explicitly outlines the transfer of lands between the two parties as part of the family settlement. The Ld. AO overlooked the significance of this MOU, which serves as a pivotal document illustrating the context and purpose behind the purported land transfer. Ld. Sr. counsel has submitted that the MOU was executed between Mr. OP Kriplani and Mr. Vishan Das Asnani to give effect to the family settlement. However, the property in question was registered in the name of Mrs. Aditi Prashant Bhatia, D/o Mr. O.P. Kriplani, therefore, the same could not be distributed/transferred through the said MOU and thus it was transferred through the gift deed although the purpose of such transfer finds its origin from the family settlement dated 14/2/15. 3.3 Ld. Sr. counsel submitted that a supplementary Memorandum of Understanding (MOU) was executed between the involved parties, outlining their mutual agreement. As per the terms of this supplementary MOU (Page 29 of PB), it was expressly decided that the MOU would become effective from the date of approval by the Hon'ble N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or disputed claims or maintain family peace and reputation by avoiding litigation; and thirdly, the agreement is driven by the expectation that it will foster amity and goodwill among family members. 3.4 Ld. Sr. counsel has relied upon the judgment of Hon ble Supreme Court in case of Digamber Patil v. Devram Girdhar Patil AIR 1995 SC 1728 and submitted that the Hon ble Apex Court has held that where the family settlement was made orally and subsequently a Memorandum of family Settlement was signed recording settlement, it did not require registration. The word family is to be understood in a broad sense and parties to family arrangement may not necessarily belong to the same family. If the dispute is one between near relations then the settlement of such dispute can be treated as Family arrangement. He referred the decision of Mumbai benches of the Tribunal in case of Sujan Azad Parikh vs. Deputy Commissioner of Income Tax 145 taxmann.com 167 and submitted that the Tribunal has held that where assessee along with other family members held shares in a business concern and assessee transferred said shares under a family arrangement as per direction of CLB, no capital gain tax was li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of search and seizure operation conducted u/s 132 of the Act on 16.05.2018 various incriminating material marked as LPS-1 to 43 were found and seized. One of the seized document part of LPS-8 was a gift deed dated 14.02.2015 executed by Aditi Bhatiya in favour of the assessee Ms. Adita Asnani. The transferor and the transferee under the said gift deed are relatives though not strictly falling under the definition of relatives provided u/s 56(2)(vii)(b) of the Act. The assesse has took a stand before the AO as well as the CIT(A) that this transfer under gift deed is between the relatives as per the definition provided u/s 56(2)(vii)(b) and pleaded that the land in question was acquired by the father and mother of Smt. Aditi Bhatia and was transferred in favour of the sister by the father of the Smt. Aditi Bhatia. Thus the assesse claimed and tried to convinced the AO as well as the CIT(A) that this transaction does not fall in the ambit of deemed income u/s 56(2)(vii)(b) of the Act but could not succeed. It is manifested from the assessment order as well as the impugned order of the CIT(A) that the AO has rejected the contention of the assessee by considering the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family settlement arrangement which was reduced in writing through MOUs and resulting demerger of the business division being the land under the business entities and then to be distributed between the parties were available before the AO being seized material. The Ahmadabad Benches of the NCLT vide order dated 03.10.2018 has approved demerger scheme as per MOU dated 27.09.2017. Ld. Sr. counsel has filed a copy of the said order dated 03.10.2018. Once the land in question was part of family settlement/arrangement and block of assets which were to be equitably distributed between the parties then the transfer of the land in question by execution of gift deed shall not be considered in isolation ignoring all other connected facts and events which have resulted this transfer. There is no dispute that if gift deed along is considered in isolation without considering other surrounding facts being the family settlement/arrangement and consequential distribution of the assets after demerger of the various parcel of the land would lead to the conclusion that this transactions falls in the ambit of section 56(2)(vii)(b)(i) of the Act and the fair market value of the land will be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related families and not in isolation. As it is manifested from the record and particularly from the seized material that 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. 5.4 It is pertinent to note that the land in question was registered in the name of Aditi Prashant Bhatia the daughter of Shri OP Kriplani and therefore, the same could not be distributed/transferred through MOU and hence, it was transferred by way of execution of gift deed but the nature of transfer finds its root in the family settlement dated 14.02.2015. All the relevant documents as found and seized during the search and seizure operation including the map establish that land in question was undisputedly part and parcel of the family settlement/arrangement along with other assets. We find force in the contention of the Ld. Sr. coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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