TaxTMI 
TaxTMI 
2018 (5) TMI 1087
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....ing officer holding that gift made by the assessee towards relinquishing 50% interest in the flat No. 52 at Ajanta Apartment, Colaba, Mumbai is a transfer within the meaning of section 2(47) of the Income Tax Act. 2. The learned CIT (Appeal) has erred in law and on the facts of the case in sustain the order of the assessing officer in not appreciating the fact that there was family agreement between members of the fami ly by vi r tue of which the as ses see relinquished her 50% interest in flat No. 52 at Ajanta Apartment, Colaba, Mumbai. 3. The assessee craves leave to add, alter or amend the above grounds of appeal." 2. The brief facts of the case are that the assessee has filed her return of income for assessment year 2013-14 decl....
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....er within the meaning of section 2(47) of the Income Tax Act, 1961. The AO after considering the relevant submissions of the assessee and also on analysis of provisions of section 2(47), observed that the assessee's alleged gift transaction by way of relinquishment of 50% interest in the property in favour of Shri Sanjay Kapoor is a transfer as Shri Sanjay Kapoor has gifted her an amount of Rs. 68,50,000/- in lieu of relinquishing her right in the property. Therefore, the said transaction cannot be treated as family arrangements and accordingly, computed long term capital gain by taking into account fair market value of the property as on the date of gift and determined long term capital gain of Rs. 6,31,019/-. 3. Aggrieved by the assessme....
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....erest in flat no. 52 in Ajanta building and gifted her share to her brother in law Mr. Sanjay kapoor. Copy of the gift deed was submitted. The other development which occurred was Mr. Sanjay kapoor gifted her 68,50,000/- in the year 2012-13 as she did not have adequate funds to buy the flat. The AO has raised the query that why applicability of sec. 2 (47) in relation to gift received by assessee from her brother in law in AY 2012-13 and gift of half share in residential flat to her brother in law in AY 2013-14 should be attracted. The assessee submitted that it is a family agreement and provision of sec 2(47) is not attracted. The AO held that as per provision sec 2(47) transfer includes sale, exchange or relinquishment of assets ....
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..... The other property bought in the name of the assessee Ms. Jyoti kapoor and her spouse in the year 2012 was purchased for total consideration of Rs. 4.5 Cr. And Rs. 2,42,82,833/- was invested by the assessee out of withdrawals from her capital Ale from the partnership firm MIs. Jyoren Enterprises and by way of loan from her husband. This shows that both properties were purchased by her own sources and so they do not fall under the ambit of family assets. From the above analysis done by the AO it is clear that the above arrangement does not come under the purview of family settlement. Hence it will be pertinent to discuss the case law of Bombay High Court CIT Mumbai vs. Sachin P. Ambulkar (2014) 42 taxmann. Com 22 (Bombay). The court hel....
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....gain on relinquishment of 50% interest in the family property in favour of another family member in accordance with family arrangement without appreciating the fact that the said transaction is a gift between two relatives. 5. On the other hand, the Ld. D.R. strongly supported the order of the Ld. CIT(A). 6. We have heard both the parties and perused the materials available on record. The factual matrix of the case are that during the year under consideration the assessee has gifted her 50% right and interest in a family property in favour of her brother in law by way of gift deed dated 07.06.12. During the same financial year the assessee also received a cash gift of Rs. 68,50,000/- from Shri Sanjay Kapoor, the person who received gift f....