AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 1087
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....f the case in sustaining the order of the assessing 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 ha....
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....nd harmony, therefore, the same cannot be construed as transfer 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 ....
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....thers should own independent flats. So Ms. Jyoti Kapoor invested her 50% interest 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....
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....ir own funds partly by way of withdrawal from her capital in the partnership firm of M/s. Jyoren enterprises so this cannot said to belong to family. 2. 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....
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....he appellants Appeal is dismissed." 4. The Ld. A.R. for the assessee submitted that the Ld. CIT(A) was erred in confirming addition made by the AO towards computation of long term capital 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 ....