Txa v. Asst. Commissioner Of Income-Tax

1 txa4-12-dt.08-11-19 Santosh IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.4 OF 2012 P.P. Mahatme, Power of Attorney Lorna Margaret Pinto, Gabmar Apartments, Vasco Da Gama. … Appellant. V/s. Asst. Commissioner of Income-tax Circle-2, Margao. … Respondent. Mr. Mihir Naniwadekar with Mr. Purushottam Karpe, Advocates forthe Appellant. Ms. Amira Abdul Razaq, Standing Counsel for the Respondent. Coram : M.S. Sonak & C.V. Bhadang, JJ. Reserved on : 6[th] November, 2019. Pronounced on : 8[th] November, 2019 J U D G M E N T: (Per M.S. Sonak, J.) Heard Mr. Mihir Naniwadekar with Mr. Purushottam Karpe for the Appellant and Ms. Amira Razaq, Standing Counselfor the Respondent. 2. This Appeal was on board for final hearing, along with Tax Appeals No.3/2012, 9/2012 and 10/2012. All these appeals involveidentical issues of both, law and fact. However, the learned Counselfor the parties requested that this Appeal be treated as the lead 2 txa4-12-dt.08-11-19 Appeal. The learned Counsel for the parties agree that the decisionin this Appeal will govern the fate of the remaining three appeals, aswell. 3.This Appeal was admitted on 13.2.2012, on the followingsubstantial questions of law : i. Whether on the facts and in the circumstances of thecase, the Appellate Tribunal is right in holding on aperverse view that the change of position by mereclarification by the Assessing Officer regarding status of theassessee, which is contrary to the reasons recorded underSection 148(2) and rule of law laid down by thejurisdictional High Court could give jurisdiction to issuethe impugned notice under Section 148, which is otherwisebarred by limitation? ii. Whether on the facts and in the circumstances of thecase, the Appellate Tribunal is right in dismissing the appealbased on incorrect appreciation of facts and law andtaking a perverse viewthat the family arrangementapproved by the Civil Court was not bonafide andconsequently there was a transfer of assets attracting tax oncapital gains ? 4.The Appellant is a Power of Attorney holder to LornaMargaret Pinto, who is a Non-Resident Indian (NRI), about whichthere is no serious dispute. The present Appellant and the Appellantsin connected Appeals, are sisters, who were involved in a disputerelating to an immovable property in the State of Goa. It was thecase of these Appellants that the said immovable property was sought 3 txa4-12-dt.08-11-19 to be usurped by Cristovam and Alvaro, relatives of the Appellants.This led to the institution of Special Civil Suit No. 255/1999, whichwas ultimately disposed of by a Consent Decree dated 17.4.1998. Interms of the Consent Decree, the Appellants received an amount ofRs.5.50 crores during the Assessment Year 1999-2000. 5.In relation to the aforesaid amount, notices under Section148 of the Income Tax Act, 1961 (IT Act) were issued to theAppellants, seeking to reopen the assessment, inter alia, on theground that the aforesaid amount was taxable “capital gains”. Thesenotices were dated 14.03.2005 and were accompanied by reasons forreopening, in which, it was stated that Mr. Pradip P. Mahatme, thePower of Attorney holder was proposed to be treated as the agent ofthe Assessee as provided in Section 163 of the IT Act. 6.Upon the Power of Attorney seeking clarification, by acommunication dated 22/03/2005, he was informed that he may filereturn in response to the notice under Section 148 as the'representative assessee' as per the provisions of Section 160(1) of theIT Act for the Assessee - Lorna Pinto. 7.The aforesaid was, however, followed by yet anothercommunication dated 21.06.2005, in which, the Assessing Officerclarified that the notices under Section 148, dated 14.03.2005 maybe read as being served upon Mr. P.P. Mahatme as the 'power of 6.Upon the Power of Attorney seeking clarification, by acommunication dated 22/03/2005, he was informed that he may filereturn in response to the notice under Section 148 as the'representative assessee' as per the provisions of Section 160(1) of theIT Act for the Assessee - Lorna Pinto. 7.The aforesaid was, however, followed by yet anothercommunication dated 21.06.2005, in which, the Assessing Officerclarified that the notices under Section 148, dated 14.03.2005 maybe read as being served upon Mr. P.P. Mahatme as the 'power of 4 txa4-12-dt.08-11-19 attorney holder' of Mrs. Lorna Margaret Pinto Wallworth. 8.The present Appellant, as well as the Appellants in theconnected Appeals, instituted Writ Petitions No.70/2006, 71/2006,72/2006 and 73/2006, before this Court, questioning the noticesdated 14.03.2005, under Section 148 of the IT Act, inter alia, on theground that the same were barred by limitation as prescribed underSection 149(3) of the IT Act. These petitions were dismissed byJudgment and Order dated 27/03/2006. 9.As against the aforesaid, the Appellants instituted SpecialLeave Petition before the Hon'ble Supreme Court, which came to bedisposed of by order dated 17.07.2006, which reads as follows : “The short question which is involved in this special leavepetition is whether the petitioner herein is assessable underIncome Tax Act as the agent of N.R.I. Assessee or whetherthe income tax assessment should be done only qua theN.R.I. Assessee. The order of assessment has been passed.It is the case of the N.R.I. Assessee that the assessment istime barred. However, the assessee has not moved inappeal before the appellate authority. Therefore, we directthe petitioner herein/ N.R.I. Assessee to move in appealwithin four weeks. Delay, if any, stands condoned. Theobjection as to limitation will also be decided by theappellate authority.” 10.The Hon'ble Apex Court by the aforesaid order dated17.07.2006, granted liberty to the Appellants to institute Appeals,because in the meanwhile, the Assessing Officer, vide Order dated 5 txa4-12-dt.08-11-19 30/03/2006, had already made an assessment order, bringing to taxthe aforesaid amount of Rs.5.50 crores as 'capital gains'. 11.The Appellant then preferred an appeal before theCommissioner of Income -tax (Appeals), which was dismissed videorder dated 14.12.2007. 12.The Appellant then instituted further appeal before theIncome Tax Appellate Tribunal (ITAT), which was also dismissed videorder dated 10.06.2011. 13.As against the order dated 10.06.2011 made by the ITAT,the Appellant has instituted the present appeal, which came to beadmitted on the aforesaid substantial questions of law. 14.Mr. Mihir Naniwadekar, learned Counsel for the Appellantsubmits that the notices dated 14.03.2005, issued under Section148 of the IT Act were clearly barred by limitation prescribed underSection 149(3) of the IT Act. He submits that the notices wereissued to Mr. P.P. Mahatme, as the 'representative assessee' as per theprovisions of Section 160 of the IT Act. He submits that Section149(3) of the IT Act clearly provides that if the person on whom anotice under section 148 is to be served is a person treated as theagent of a NIR under section 163, then, such notice shall not beissued after expiry of the period of 2 years. He submits that 6 txa4-12-dt.08-11-19 therefore, the notice dated 14.03.2005 which was issued well beyondthe period of 3 years from the end of relevant assessment year, wasclearly barred by limitation, as then applicable. 6 txa4-12-dt.08-11-19 therefore, the notice dated 14.03.2005 which was issued well beyondthe period of 3 years from the end of relevant assessment year, wasclearly barred by limitation, as then applicable. 15.Mr. Naniwadekar submits that merely because theprovisions in Section 143(3) of the IT Act were amended with effectfrom 01/07/2012 so as to extend the period of limitation to six years,the Revenue cannot seek to derive any advantage from suchamendment, which is basically prospective in nature. He submitsthat even the explanation to Section 149(3) of the IT Act, at thehighest saves assessment for the Assessment Year 2010-11 andAssessment Year 2011-12. He submits that based upon theamendment of 2012, it was clearly impermissible for the Revenue toreopen the time barred assessment on the date when the notice dated14.03.2005 came to be issued in the present matters. In support ofthis contention, Mr. Naniwadekar relies on Union of India andors. vs. Uttam Steel Limited[1] 16.Mr. Naniwadekar submits that the notices dated14.03.2005 issued under Section 148 are vitiated because it is settledlaw that the reasons in support of such notice cannot besupplemented at a later stage, even by filing an affidavit or producingany additional material. He submits that the notice under Section148 requires sanction and such a sanction is issued to the reasonsrecorded for reopening of the assessment which accompany the notice1(2015) 13 SCC 209 7 txa4-12-dt.08-11-19 under Section 148 of the IT Act. If such reasons are permitted to besupplemented, as has been done in the present matter by issuance ofthe communication dated 21.06.2005, then the principle that thereasons cannot be permitted to be supplemented or the principlethat no fresh reasons can be stated, will stand breached. He submitsthat this is yet another reason for setting aside the notice dated14.03.2005 issued under Section 148 of the IT Act. In support ofthis contention, he relies on Hindustan Lever Ltd. vs. R.B.Wadkar[2] 17.Mr. Naniwadekar, without prejudice to the aforesaid,submits that even, otherwise, this is a clear case where the parties haveentered into a 'family settlement' or 'family arrangement', which isperfectly bonafide. He submits that the consideration received underthe family settlement, even upon transfer of right and interest in thefamily property, is not taxable as capital gain under Section 145 ofthe IT Act. He submits that in fact, in such a situation there is reallyno transfer or relinquishment of any right to the immovable propertyas such. In any case, the proceeds received on the basis of suchfamily settlement or family arrangement cannot be brought to tax ascapital gains. He submits that from the material on record, it is morethan apparent that there was a bona fide family settlement arrived atbetween the members of the Assessees's family who have received theamount of Rs.5.50 crores, as a consequence of such family settlement 8 txa4-12-dt.08-11-19 alone. He submits that the Revenue has exceeded its jurisdiction intreating such amount as capital gains and bringing the same to tax.In support of this contention, Mr. Naniwadekar relies on thefollowing decisions : i) Commissioner of Income-tax, Mumbai vs. Schin P. Ambulkar[3];ii) Kale and others vs. Deputy Director of Consolidation andothers[4]; iii) Commissioner of Income-tax vs. Kay Arr Enterprises [5]. 8 txa4-12-dt.08-11-19 alone. He submits that the Revenue has exceeded its jurisdiction intreating such amount as capital gains and bringing the same to tax.In support of this contention, Mr. Naniwadekar relies on thefollowing decisions : i) Commissioner of Income-tax, Mumbai vs. Schin P. Ambulkar[3];ii) Kale and others vs. Deputy Director of Consolidation andothers[4]; iii) Commissioner of Income-tax vs. Kay Arr Enterprises [5]. 18.Ms. Razaq, learned Standing Counsel for the Respondentdefends the impugned order on the basis of the reasoning reflectedtherein. She points out that the Appellants had actually challengedthe notice dated 14.03.2005 by instituting writ petitions before thisCourt, which writ petitions came to be dismissed vide Judgment andOrder dated 27/03/2006. She submits that the order made by theHon'ble Apex Court on 17.07.2006, at the highest leaves open thepoint of limitation. However, it is not permissible for the Appellantto once again question the notices under Section 148 of the IT Acton any ground other than limitation. 19.Ms. Razaq submits that in any case, the principle inHindustan Lever Ltd. (supra) will clearly not apply in the presentcase, because, the Revenue has neither added to, nor supplemented 3[2014] 42 taxmann.com 22 (Bom) 4[1976] 3 SCC 119 5299 ITR 348 (Mad) 9 txa4-12-dt.08-11-19 the reasons accompanying the notice dated 14.03.2005 under Section148 of the IT Act. She points out that the reasons remained thesame and the communication dated 21.06.2005 merely clarified thatthe notices were served upon Mr. P.P. Mahatme in his capacity as thepower of attorney holder for the Assessee and not as therepresentative assessee. She, therefore, submits that there is no anyinfirmity whatsoever in the notice dated 14.03.2005 issued underSection 148 of the IT Act. 20.Ms. Razaq submits that once it is accepted that the noticeswere issued to Mr. P.P. Mahatme only as the power of attorneyholder on behalf of Assessees who are NRIs, the period of limitationwhich will apply, is six years and not merely two years as urged onbehalf of the Appellant. She submits that in any case, theamendment of 2012, when read with the Explanation, makes it clearthat the notice issued on 14.03.2005, was well within theprescribed period of limitation. She submits that the explanationmakes it clear that the amendment of 2012 will be applicable forany assessment year beginning on or before the 1[st] day of April 2012.She, accordingly, submits that the first substantial question of law bedecided against the Appellant and in favour of the Revenue. 21.Ms. Razaq submits that this is not at all a case of anybonafide family settlement, because the material on recordoverwhelmingly establishes that the parties with whom the Assessees 10 txa4-12-dt.08-11-19 have chosen to settle the dispute had no preexisting right in theimmovable property which was the subject matter of the dispute. Shepoints out that the decisions relied upon by the Appellant are in thecontext of family settlements, in which preexisting rights of theparties were realigned or adjudicated upon. She submits that this isan essential distinguishing feature which has been noted by not lessthan three authorities, who have recorded the concurrent findings offact. She submits that the concurrent findings of fact so recorded,suffer from no perversities and, therefore, warrant no interference inexercise of limited jurisdiction under Section 260A of the IT Act.She relies on the following decisions in support of her contentions : a) Union of India vs. Playworld Electronics (P.) Ltd.[6] ; b) Banarsi Lal Aggarwal vs. Commissioner of Gift-tax[7] c) B.A. Mohota Textiles Traders (P.) Ltd. vs. DeputyCommissioner of Income-tax, Special Range-2[8]; andd) Commissioner of Income-tax vs. B.M. Kharwar[9] 22.Rival contentions now fall for our determination. b) Banarsi Lal Aggarwal vs. Commissioner of Gift-tax[7] c) B.A. Mohota Textiles Traders (P.) Ltd. vs. DeputyCommissioner of Income-tax, Special Range-2[8]; andd) Commissioner of Income-tax vs. B.M. Kharwar[9] 22.Rival contentions now fall for our determination. 23.The first point which arises for determination is in thecontext of the first substantial question of law, namely whether onthe facts and in the circumstances of the present case, the ITAT was 61989 taxmann.com 651 (SC) 7230 ITR 114 (Punjab & Haryana) 8397 ITR 616 (Bombay) 972 ITR 603 (SC) 11 txa4-12-dt.08-11-19 right in holding that the notice dated 14.03.2005 issued underSection 148 of the IT Act, was legal and valid. 24. Challenge to the notice dated 14.03.2005 issued underSection 148 of the IT Act is based upon the following two grounds : (i) that the issuance of communication dated 21.6.2005, in which, itis stated that the notice dated 14.03.2005 should be read as addressedto Mr. P.P. Mahatme, as power of attorney holder of the Assessee,instead of 'representative assessee' of Mrs. Lorna Pinto, amounts toadding or supplementing the reasons originally accompanying thenotice dated 14.03.2005 and it is urged that such supplementing ofreasons is impermissible, in terms of the law laid down in HindustanLever Ltd. (supra). (ii) In any case, the issuance of notice dated 14.03.2005 underSection 148 of the IT Act is barred by limitation prescribed underSection 149(3) of the IT Act. It is further urged that the notice,which was already barred by limitation in terms of law in force in theyear 2005, cannot be revived by virtue of an amendment which cameinto force on 1.7.2012, in which the period of limitation wasextended from two years to six years. In support of this precisecontention, reliance was placed on Uttam Steel Limited (supra). 25.On the first aspect as aforesaid, we note that this wasprecisely the challenge raised by the Appellants by instituting WritPetitions No.70/2006, 71/2006, 72/2006 and 73/2006, in which, the 12 txa4-12-dt.08-11-19 notice dated 14.03.2005 was squarely challenged. This ground wasspecifically rejected in the Judgment and Order dated 27/03/2006.Thereafter, the Appellants instituted Special Leave Petition, inwhich, liberty was granted to the Appellants to raise the issue oflimitation. There was no specific liberty granted to the Appellants toquestion the notice dated 14.03.2005 on the ground that thecommunication dated 21.6.2005 amounts to supplementing oradding to the reasons accompanying the notice dated 14.03.2005.Thus, we are not too sure whether the Appellant was justified onceagain in raising the aforesaid ground before the authorities or for thatmatter, before this Court. 26.In any case, even, upon evaluation of such ground, we aresatisfied that the view taken by the authorities, warrants nointerference. This is because the communication dated 21.06.2005nowhere supplements or adds to the reasons accompanying thenotice dated 14.03.2005. All that communication dated 21.6.2005clarifies is that the notice was issued to Mr. P.P. Mahatme in hiscapacity as the power of attorney holder of the Assessee. There isreally no dispute that Mr. P.P. Mahatme was indeed the power ofattorney holder of the Assessee. In these circumstances, the principlein Hindustan Lever Ltd (supra) is certainly not attracted. In the saiddecision, reasons which found no place in the notice proposing toreopen the assessment, were sought to be introduced by means of anaffidavit or making oral submissions in response to the challenge to 13 txa4-12-dt.08-11-19 13 txa4-12-dt.08-11-19 such notice. It is, in these circumstances that the Hon'ble ApexCourt, held that the reasons cannot be supplemented by filing anaffidavit or oral submissions, so as to supply material particulars inwhich the said notice was lacking. Therefore, even on merits, we seeno ground to differ from the view taken by the authorities on theissue of validity of the notice dated 14.03.2005, issued under Section148 of the IT Act. 27.On the second aspect again, we are satisfied that the noticedated 14.03.2005 under Section 148 of the IT Act was issued withinthe prescribed period of limitation as obtained on the date of itsissuance. Section 149(3) of the IT Act, inter alia, provides that if theperson on whom a notice under section 148 is to be served is aperson treated as the agent of the NRI under section 163, then, thenotice on such agent of the NRI, shall not be issued after the expiryof a period of two years from the end of the relevant assessment year.In this case, however, from the clarification contained in thecommunication dated 21.6.2006, it is apparent that the notice issuedto Mr. P.P. Mahatme, was not in his capacity as the agent of theNRI-Assessee, but the same was issued to him as the power ofattorney holder of the NRI-Assessee. In such a situation, the periodof limitation for issuance of the notice was always 6 years. Therefore,the notice dated 14.03.2005 being within 6 years from the end ofrelevant assessment year, which is 1999-2000, was well within theperiod of limitation, as then prevalent. 14 txa4-12-dt.08-11-19 28.The provisions of Section 149(3) of the IT Act wereamended by the Finance Act, 2012 with effect from 1/7/2012. Theamendment extended the period of limitation for issuance of noticeunder Section 148, even upon the agent of the NRI, from 2 years to6 years. 29.Explanation to Section 149(3) again introduced by theFinance Act, 2012, reads as follows : “Explanation.—For the removal of doubts, it is herebyclarified that the provisions of sub-sections (1) and (3), asamended by the Finance Act, 2012, shall also be applicablefor any assessment year beginning on or before the 1st dayof April, 2012”. 30.Looking to the width of the aforesaid explanation, it is not possible to accept Mr. Naniwadekar's contention that the extendedperiod of limitation will apply only to the assessments for theAssessment Year 2010-11 or 2011-12. The explanation refers to anyassessment year beginning on or before the 1st day of April, 2012.The explanation has been introduced specifically for the purpose ofremoval of doubts or to clarify the position with regard to theapplicability of the amended provisions. 31.Mr. Naniwadekar had placed reliance upon paragraph10.1 in Uttam Steel Limited (supra) which, in turn, refers to the 15 txa4-12-dt.08-11-19 decision in S.S. Gadgil vs. Lal and Co. reported in AIR 1965 SC171. In the said decision, it is true that the Hon'ble Apex Court heldthat the subsequent amendment will not assist the Revenue tocommence a proceeding even though at the date on which the noticefor commencement was issued, when such notice was barred bylimitation. However, Hon'ble Apex Court added that such provisionmust be read subject to the rule that in the absence of an expressprovision or clear implication, the legislature does not intend toattribute to the amending provision a greater retrospectivity than isexpressly mentioned, nor to authorise the Income Tax Officer tocommence proceedings which before the new Act came into forcehad by the expiry of the period provided, become barred. 32.In the present case, the explanation to Section 149 of theIT Act makes all the difference. The explanation, is an expressprovision that the legislature intended the amendment to apply forany assessment year, beginning on or before 1st day of April, 2012.The ruling in Uttam Steel Limited (supra), or for that matter, in S.S.Gadgil (supra) is, therefore, distinguishable. 32.In the present case, the explanation to Section 149 of theIT Act makes all the difference. The explanation, is an expressprovision that the legislature intended the amendment to apply forany assessment year, beginning on or before 1st day of April, 2012.The ruling in Uttam Steel Limited (supra), or for that matter, in S.S.Gadgil (supra) is, therefore, distinguishable. 33.In any case, it is clarified that even, without resort to theamendment of 2012, in the facts and circumstances of the presentcase, it is quite clear that the notice dated 14.3.2005 was issued wellwithin the period of limitation, as prevalent on the date of issuanceof such notice. 16 txa4-12-dt.08-11-19 34.For the aforesaid reasons, the first substantial question oflaw is required to be answered against the Appellant and in favour ofthe Revenue. 35.In so far as the second substantial question of law isconcerned, it is necessary to note that the Assessing Officer,Commissioner of Income-tax (Appeals) and the ITAT haveconcurrently held that notwithstanding the nomenclature of thesettlement, or the fact that the settlement is incorporated in theConsent Decree, the same is not a family settlement as such, theprinciple in Sachin Ambulkar (supra) is inapplicable. This meansthat the three authorities have basically returned a finding of factthat the settlement in this case, is not a family settlement as such, soas to regard the income derived therefrom by the Appellant asinexigible to capital gains tax. 36.The family settlement referred to in Sachin Ambulkar(supra) was a settlement amongst family members in the context oftheir 'preexisting right'. In this context, the ITAT whose decisionwas questioned by the Revenue in the case of Sachin Ambulkar(supra), had held that since the settlement 'only defines a preexistingjoint interest as separate interests, there is no conveyance, if thearrangement is bonafide'. Since there is no conveyance, there is noneed for registration of such arrangements, when orally made, even if 17 txa4-12-dt.08-11-19 later on reduced to writing. The ITAT, thereafter, followed thedecision of the Hon'ble Apex Court in the case of Maturi Pullaiahvs. Maturi Narasinham, reported in AIR 1966 SC 1836 and heldthat where there is no transfer of assets in the family arrangement andthe amount received by the Assessee is part of the familyarrangement and not towards the transfer of any capital assets, suchamount cannot be regarded as a capital gain and no capital gains taxliability arises. In Sachin Ambulkar (supra), this Court declined tointerfere with the view taken by the ITAT by observing that thedecision of the ITAT 'is based on facts. Hence no question of lawarises'. 37.The findings of fact, in the present case, concurrentlyrecorded by all the three authorities indicate that there was no issueof any 'preexisting right' as between the Appellants, Cristovam andAlvaro, who are alleged to have usurped the immovable propertybelonging to the Appellants. In fact, the record which has beenassessed in detail by the the Commissioner of Income-tax (Appeals),establishes that the properties of Xavier Pinto were allocated to histhree sons Jose, Rosario and Antonio who, in turn, had one son eachby name of Alvaro, Cristovam and Anthony. Anthony migrated toEngland along with his father Antonio. Margaret (present assessee)is the wife of Anthony. They had three daughters Lorna, Julia andSiobhan who are the Appellants in the connected Appeals. Sincethere was already a partition of the properties owned by Xavier Pinto 18 txa4-12-dt.08-11-19 18 txa4-12-dt.08-11-19 between his three sons Jose, Rosario and Antonio sometime in 1950s,obviously Alvaro and Cristovam had no right whatsoever in theimmovable properties exclusively belonging to Antonio and after hisdemise, his son Anthony. After demise of Anthony, the propertieswere exclusively inherited by the present Appellants, who are the wifeand daughter of said Anthony. 38.In fact, it was the case of the Appellants that Alvaro andCristovam had no right whatsoever to the immovable property inquestion, which was partitioned in favour of their predecessor-in-titlefor almost three generations. Since, there was no issue of any'preexisting right' as such between the Appellants and the saidCristovam and Alvaro, it can really not be said that the settlementarrived at between the Appellants and the said two persons qualify thesame as bonafide family settlement, in order to infer therefrom thatthe consideration received was not some capital gains. These are allfindings of fact, recorded by the three authorities. These findingsare duly borne from the material on record and even the interferencesdrawn cannot be said to be vitiated by any perversity as such. 39.The decision in Kale and others (supra) is quitedistinguishable, because in the present case, there is clear and cogentmaterial available on record to establish that Cristovam and Alvarohad no right in the immovable property which was the subject matterof dispute and consequently the settlement between the Appellant 19 txa4-12-dt.08-11-19 and the said two persons can hardly be described as a familysettlement. The settlement may be enforceable inter-parties now thatthe same is incorporated in the consent terms, based upon a consentdecree may have been issued. However such settlement, cannot becalled as a family settlement or family arrangement, as is understoodin the case of Kale and others (supra) or in the case of SachinAmbulkar (supra). Merely because dispute involved some familymembers and such dispute is ultimately settled by filing consentterms, the same cannot be styled as a family arrangement or familysettlement and on such basis, it cannot be held that the considerationreceived as a result of such settlement, does not constitute capitalgain. 40.The decision in the case of Kay Arr Enterprises (supra), alsorelies upon the decisions in Kale and others (supra), and MaturiPullaiah (supra). Again, in the said case as well, the view taken is thatthe family settlement was nothing, but a realignment of preexistingright and thus, there was no liability for payment of any capital gainstax . 41.This Court, in the case of B.A. Mohota Textiles Traders (P.)Ltd. (supra) has, however, taken a view different from the view takenby Madras High Court in Kay Arr Enterprises (supra). This Courthas held that a family settlement through the Court which requiredthe Assessee Company to transfer shares held by it in another 20 txa4-12-dt.08-11-19 company in favour of certain family members, will be required to paythe capital gains tax, since the Assessee was a separate legal entitybeing incorporated as a limited company. The substantial question oflaw was, accordingly, decided in favour of the Revenue and againstthe Assessee. 41.This Court, in the case of B.A. Mohota Textiles Traders (P.)Ltd. (supra) has, however, taken a view different from the view takenby Madras High Court in Kay Arr Enterprises (supra). This Courthas held that a family settlement through the Court which requiredthe Assessee Company to transfer shares held by it in another 20 txa4-12-dt.08-11-19 company in favour of certain family members, will be required to paythe capital gains tax, since the Assessee was a separate legal entitybeing incorporated as a limited company. The substantial question oflaw was, accordingly, decided in favour of the Revenue and againstthe Assessee. 42.In Banarsi Lal Aggarwal (supra), the Assessee constructeda property by taking loans from his family members. As he failed torepay the loan, the family members claimed a share in the property.The Assessee gave them 3/4[th] share in a family settlement by way of aCourt Decree and claimed that this being a family settlement, no gifttax was chargeable. The Division Bench of Punjab and HaryanaHigh Court, however, held that merely because the loans were notrepaid by the Assessee to his family members, it could not create atitle in them in the property which would entitle them to claimpartition by way of family settlement of the property in question.Based upon such reasoning, the High Court upheld the view takenby the ITAT that there was no valid family settlement amongst themembers of the family and based upon such settlement, levy of gifttax could not have been avoided. The High Court considered anddistinguished the decision in Kale and others (supra). 43.For all the aforesaid reasons, we are satisfied that thefindings of fact recorded concurrently by the three authorities sufferfrom no infirmity, so as to give rise to the second substantial question 21 txa4-12-dt.08-11-19 of law framed in this matter. Accordingly, even the second substantialquestion of law is required to be answered against the Appellant andin favour of the Revenue. 44.As a result, this Appeal fails and is, hereby, dismissed.There shall be no order as to costs. C.V. Bhadang, J. M.S. Sonak, J.