2004 (1) TMI 20

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....eferred by Mrs. Fathima Rahim as the legal heir of the late Sri A.A. Rahim and G.T.A. No. 2/Coch of 2000 was preferred by Mrs. Fathima Beevi. Common order was passed in G.T.A. Nos. 1/Coch of 2000 and 2/Coch of 2000 and separate order has been passed for the year 1996-97. Azad Rahim is the appellant in G.T.A No. 3/Coch of 2000. Common questions arise for consideration in all these appeals and hence we are disposing of these appeals by a common judgment. The late Sri A.A. Rahim and his wife, Smt. Fathima Beevi jointly executed a settlement deed No. 1606 of 1995 on April 20,1995, settling their immovable properties described in the schedules in favour of their sons, daughters and grandson. The Assessing Officer held that the properties settle....

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.... No. 3/Coch of 2000, the assessee is the son of Fathima Rahim. The assessee's mother, Smt. Fathima Rahim, filed a return on February 25, 1997, declaring taxable gift as nil. Since there was no response hearing was posted on January 28, 1998, for determining the fair market value of the gifted property and the matter was referred to the Valuation Cell on September 2, 1998. After further hearing, the assessment was completed under section 15(3) of the Gift-tax Act, 1958, on March 22, 1999, determining the taxable gift at Rs. 74,80,750 for the assessment year 1996-97. It was noticed that as per document No. 1606 dated April 20, 1995, properties belonged to the assessee's mother and father were gifted to their children and a minor grandchild. T....

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....f the Transfer of Property Act are not applicable to Muslim gifts. Counsel appearing for the appellant placed reliance on the decisions in Chellappan Nadar v. Krishnan Nair [1963] KLT 750 and Pocker v. Kathiya [2000] 1 KLT 430. Counsel appearing for the Revenue placed reliance on the decisions in W.O. Holdsworth v. State of Uttar Pradesh [1938] 33 ITR 472 (SC); CWT v. Kripashankar Dayashanker Worah [1971] 81 ITR 763 (SC) and Ismail v. Idrish, AIR 1974 Patna 54. The only question to be considered is whether settlement deed No. 1606 of 1995 dated April 20, 1995, settling the immovable properties in favour of the children and grandson is a gift under the provisions of the Gift-tax Act. The term "gift" is defined in section 2(xii) as follows: ....

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.... right at least a portion of the property being partitioned. The properties involved in the document exclusively belong to the assessee, the late Rahim, and his wife, and they have been settled on his children and grandchild. At pages 12 and 13 of the document it has been clearly stated that the properties belonged to the assessee and his wife and the intention is to clearly set apart those properties to others who are their successors with the intention of the future well being and unity of each of the successors and it is being done as per the desire of the assessee and his wife. At pages 14 and 15 it has been clearly stated that possession and enjoyment has been released by all in favour of the owners of each schedule of property permane....