TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 80
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.... lower appellate discussion. 4. We advert to the basic relevant facts. There is hardly any dispute between the parties that the impugned long-term capital gains have been assessed in the assessee's hands on account of the fact that she had allegedly transferred her share to the real sister, Mrs. Meenakshi Vohra, in the relevant previous year. A perusal of the assessment order indicates that both the assessee, namely, Mrs. Manju Khanna and her sister Mrs. Meenakshi Vohra had in fact inherited an ancestral House No. 87, Sector-18A, Chandigarh. And that the assessee's mother had executed a "Will" bequeathing the said entire house to the assessee's sister with a caveat that the former would be either entitled to get 45% of the value in the above house or cash amount of Rs. 40 lakhs, whichever is lesser. Learned Assessing Officer himself does not dispute that the said "Will" was executed by the testator/assessee's mother on 3rd July, 2002 followed by her death of 27th September, 2010. And that there arose civil dispute(s) between the assessee and her sister regarding their respective shares in the above house; which is stated to have attained finality before the hon'ble apex court, w....
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.... Group 'A' is headed by Smt. Sudarshan Chopra, whereas Group 'B' is headed by Shri Vijay Kumar Chopra. After prolonged litigation, during the pendency of an appeal before this Court against an order of the Company Law Board, parties agreed to settle their disputes. Earlier, Group 'B' has given a proposal for dividing the assets and businesses of the family including the company into two lots i.e. lot-1 containing the Jalandhar and Ambala units, whereas lot-2 containing Delhi and Jaipur units. Group 'B' offered Group 'A' to choose one of the lots. Instead of choosing one of the lots, Group 'A' filed an application under Section 8 of the Arbitration & Conciliation Act, 1996 which was dismissed by the Company Law Board on 17.05.2004 laying down the modalities for the division of the company. The said order was challenged before this Court. The parties agreed to settle the disputes amicably as recorded by this Court in the order dated 19.10.2005. The relevant extract of the order dated 19.10.2005 reads as under: "The appellants as well as Group A have decided to settle the matter amicably. It has been agreed that the appellants w....
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....t operate." 7. The assessee filed an appeal against the said order. The learned Commissioner of Income Tax (Appeals) held that distribution of assets including sum of Rs. 24 crores was not complete during the relevant year as the matter was sub-judice and the assessee was not allowed to use the money by the order of this Court, therefore, the sum of Rs. 24 crores transferred to the assessee and other members of Group A did not accrue to the income of this group including the appellant. Such order has been affirmed in appeal as well by the Tribunal. 8. Learned counsel for the appellant has vehemently argued that the amount of Rs. 24 crores was deposited by the other Group, as compensation to the assessee in the present set of appeals. Though the assessee cannot use money in terms of the order passed by this Court, but the fact remains that the interest on such deposit is an income and is liable to tax. It is argued that the order of Commissioner of Income Tax and that of the Tribunal are based upon misapprehension of facts and law, therefore, the capital gain is payable on the amount of compensation received. 9. On the other hand, learned counsel for the r....
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.... family, such a provision of owelty ordinarily creates a lien or a charge on the land taken under the partition. The member to whom excessive allotment of property has been made on such partition cannot claim to acquire properties falling to his share irrespective of or discharge from the obligation to pay owelty to the other members. What he gets for his share is, the properties subject to the obligation to pay such owelty and that by necessary implication, an obligation on his part to pay owelty out of the properties allotted to his share. It was observed as under: "18. It therefore follows that when an owelty is awarded to a member on partition for equalization of the shares on an excessive allotment of immovable properties to another member of the joint family, such a provision of owelty ordinarily creates a lien or a charge on the land taken under the partition. A lien or a charge may be created in express terms by the provisions of the partition decree itself. There would thus be the creation of a legal charge in favour of the member to whom such owelty is awarded. If, however, no such charge is created in express terms, even so the lien may exist because it is impli....
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....are of the member with the excessive allotment is that excessive allotment less the owelty carved out of it and the share of the other member is the lesser allotment added with the owelty carved out of the excessive allotment. This again means that owelty is only part of the properties partitioned; it may not be part of the original properties; but, if I may borrow the expression of Maclean, C.J. in the Calcutta case which I shall hereinafter refer to, it is the substituted property which the sharer gets in the partition." 14. In Sivaswami Chettiar Vs. Muthuswami Chettiar & others (1965) 78 LW 695, the Madras High Court held that owelty represents the difference arising out of unequal partition and is a nature of property and not a debt. The Court observed as under: "2. Owelty of course represents the difference arising out of unequal partition and is in the nature of property and not a debt. When equal partition for some reason or other is not possible, in order to adjust rights and equities, the sharer who has been allotted property in excess of his due is directed to make good to the other sharer who has been allotted less, to the extent of such excess. In my v....
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....mily property or the peace and security off the family by avoiding litigation or by saving its honour. So, the family arrangements are governed by principles which are not applicable to dealings between strangers and the family arrangement among them is for the interest of the family, for the harmonious way of living. So, such realignment of interest by way of effecting family arrangement among the family members would not amount to transfer." 17. In Kay Arr Enterprises case (supra), there was transfer of shares as also consideration in cash. The Court held that such rearrangement of shareholding in the Company is to avoid possible litigation among the family members and is prudent arrangement and such transfer of shares is not alienation. The Court held to the following effect: "9. In the instant case also, the Tribunal found that the rearrangement of shareholdings in the company to avoid possible litigation among family members is a prudent arrangement which is necessary to control the company effectively by the major shareholders to produce better prospects and active supervision or otherwise there would be continuous friction and there would be no peace among ....