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TMI Blog2024 (5) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred as "AO") as per the order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as "the Act". 2. Assessee has filed an appeal with following grounds of appeal: 1. The Ld. NFAC-CIT(A) erred on facts and in law in not adjudicating the validity of assessment made by the Assessing Officer on the issues other than the issues for which notice u/s 143(2) was issued under CASS for limited scrutiny. 2. The Ld. NFAC-CIT(A) erred on facts and in law in not appreciating that family settlement/arrangements are not transfer and, therefore, gift of land made by the aunt of the appellant's husband to appellant under family settlement arrangement cannot be subjected to provisions of section 56(2)(x) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 143(2) was issued under CASS for limited scrutiny. The counsel for the assessee stated that the notice u/s 143(2) was issued to verify the investment in immovable property but the notice u/s 1422(1) sought details of purchase of immovable property. 5.1 Ld. DR represented that the notice was issued on the basis of information received from SRO which equated gift with purchase and hence the notice was issued for limited purpose of verification of purchase of immovable property. The AO has restricted the scope of assessment to the property under question and has not extended it to another gift received by the assessee. 6. Considering the facts put forward by Ld. DR we dismiss the first ground of the assessee. Ground no. 2 and 3 7. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of property without adequate consideration should be taxed as income. She also objected to admission of additional evidence. In the interest of justice such additional evidence is admitted. 11. We have heard the rival submissions, perused the material on record, and duly considered the judicial precedents cited. The primary issue before us is whether the receipt of immovable property under a family arrangement falls within the purview of section 56(2)(x) of the Act. 12. Upon careful consideration, we find that family arrangements are made to resolve potential disputes and maintain family harmony. Such arrangements are often made out of love and affection among family members and are not in the nature of transfers for consideration. Vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty is received under family settlement. 17. Hon'ble Supreme Court in Kale & others Vs. Deputy Director of Consolidation, 1976 AIR 807 has explained the concept of family arrangements and their legal validity. The court held that a family arrangement can be even oral, and registration is necessary only if the terms are reduced into writing. The object of a family arrangement is to protect the family from long drawn litigation or perpetual strife which mars the unity and the solidarity of the family. The court also held that the family arrangement must be bona fide so as to resolve family disputes. 18. In case of Krishna Bihari Lal V. Gulabchand, 1971 AIR 1041, SCR 27 (Supreme Court of India), it was held that the word 'family' has a w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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