Commissioner Of Income Tax, Shimla v. Ashish Dass Gupta

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA I.T.A No. 29 of 2010 Date of decision: 28.7.2010 Commissioner of Income Tax, Shimla. …. Appellant Versus Ashish Dass Gupta. Coram: ….. Respondent The Hon’ble Mr. Justice Deepak Gupta, J. The Hon’ble Mr.Justice Sanjay Karol, J. Whether approved for reporting? No For the appellant: Mr.Vinay Kuthiala, Advocate For the respondent: None Deepak Gupta, J.(Oral) In this appeal by the revenue, the following questions of law have been raised:- 1.Whether the transfer of property to a wife without any fair or equitable distribution amongst the other members of the family, especially when no dispute existed amongst the members, amounted to a ‘family arrangement’ as envisaged by law, and was consequently not liable to gift-tax under section 2(xii) of the Gift Tax Act, 1958? any fair or equitable distribution amongst the other members of the family, especially when no dispute existed amongst the members, amounted to a ‘family arrangement’ as envisaged by law, and was consequently not liable to gift-tax under section 2(xii) of the Gift Tax Act, 1958? 2.Whether the Ld.ITAT has misconstrued and misinterpreted the judgment of the Hon’ble Supreme Court in Kala Vs. Dy.Director of Consolidation AIR 1976 SC 807? misinterpreted the judgment of the Hon’ble Supreme Court in Kala Vs. Dy.Director of Consolidation AIR 1976 SC 807? The assessee donated a house to his second wife but did not pay gift tax on the same on the ground that this gift had been made by way of family arrangement. The reason given by the assessee was that he had divorced his first wife from whom he had one son. To remove the insecurity of his second wife, he had gifted the house to his second wife since he did not plan to have any child from the second marriage. The question which arises is whether the transfer of the house is a bona fide family arrangement or not. The learned Tribunal has come to a finding that this is a bonafide family arrangement. The question whether a family arrangement is bona fide or not is not a question of law, much less a substantial question of law. It is a pure question of fact. Therefore, the appeal is not maintainable since no question of law arises in the same. The appeal is accordingly dismissed. No order as to costs. ( Deepak Gupta ) Judge July 28, 2010 (Sanjay Karol) (m) Judge