https://www.taxtmi.com/caselaws?id=66335 A bona fide family settlement made to avert future disputes and preserve family amity is not treated as a transfer for gift-tax purposes. The assessee had settled funds in favour of his grandsons after changing his earlier intention to adopt one of his daughter's children, and the arrangement was made to avoid family discord and soften the daughter's grievance. The fact that the original return had treated the amount as taxable did not alter the legal character of the settlement. Even a possible claim, or a semblance of claim arising from family relationship or affection, is sufficient for such a settlement; an enforceable legal right is not required. The transfer was therefore not liable to gift-tax. en-us Mon, 09 Jul 1990 00:00:00 +0530 Wed, 23 Feb 2011 16:26:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=66335 A bona fide family settlement made to avert future disputes and preserve family amity is not treated as a transfer for gift-tax purposes. The assessee had settled funds in favour of his grandsons after changing his earlier intention to adopt one of his daughter's children, and the arrangement was made to avoid family discord and soften the daughter's grievance. The fact that the original return had treated the amount as taxable did not alter the legal character of the settlement. Even a possible claim, or a semblance of claim arising from family relationship or affection, is sufficient for such a settlement; an enforceable legal right is not required. The transfer was therefore not liable to gift-tax. Case-Laws Income Tax Mon, 09 Jul 1990 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=66335