Mrs. Ruth Gonsalves Furtado v. Commissioner Of Income Tax And Anr

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 42 OF 2007 MRS. RUTH GONSALVES FURTADO VersusCOMMISSIONER OF INCOME TAX AND ANR., ... Appellant ... Respondents Mr. D. E. Robinson and Melwyn J. Aguiar, Advocate for the appellant.Mr. S. R. Rivonkar, Advocate for the respondents. P.C. -Coram:R. S. MOHITE &N. A. BRITTO, JJ.-Date:16th July, 2007 Heard both sides. This is an appeal impugning the Order dated19th January, 2007 passed by the Incometax Appellate Tribunal, PanajiBench, Panaji dismissing the appeal bearing ITA No.130/PNJ/2006. 2. It was the case of the appellant that she had entered into anagreement of sale dated 11.4.2001 with her two sons and had agreed tosell to each of them 1/3rd of the undivided share which was for aconsideration of Rs.10,00,000/-. The assessee offered long term capitalgain of Rs.89,687/- and 1/3rd of the total rent received was offered fortax. The remaining 2/3rd was offered for tax by the sons equally in theirrespective cases. 3. The Tribunal and the lower authority found that there was no saledeed executed and there was no evidence filed to prove that thetransaction has been entered into the Municipal Corporation's records. The arrangement was held to be more in the nature of a familyarrangement with a view to reduce the tax liability. It was held that in the facts of the case, there was no transfer in terms of Section2(47)(v)/(vii) of the Incometax Act. It was noticed that as per clause (6)of the Agreement dated 11.3.04, the two sons were specifically forbiddenfrom assigning, transferring , mortgaging, hypothecating or otherwisealienating their respective shares in any manner till the consideration wasfully paid. It was only on full payment of consideration that they would have a right of pre-emption or sale or transfer. It was observed thatneither any consideration was received from the sons nor any constructivepossession or enforceable right was conferred on the sons. 4. Before us, it has been sought to be contended that under theagreement, the sons had been enabled to enjoy the property in questionwithin the meaning of Section 269 UA(f)(ii) of the Act. On the facts ofthis case, it is clear that the original lessee had not agreed to pay 2/3rdrent directly to the sons. Admittedly, there is no registration of thedocument and hence, no rights of ownership passed to the sons. Even,otherwise, under the agreement sons are specifically forbidden fromassigning, transferring , mortgaging, hypothecating or otherwise dealingwith the property as mentioned in the said clause. There is no substantialquestion of law which has been raised. Hence, the appeal is dismissed. R. S. MOHITE, J. ssm. N. A. BRITTO, J.