Commissioner Of Wealth Tax v. Smt. Pushpa Garg — 1996 DIGILAW 694 (MP)

ORDER A. K. TIWARI, J. These reference cases are heard as connected matters and are being disposed of by this common order. 2. Briefly stated, the facts are as under (a) IT Ref No. 22 of 1995 At the instance of CWT, Bhopal, the Tribunal stated the case and referred the under noted questions under s. 27 of the WT Act, 1957 (for short 'the WT Act') on application registered as R.A. Nos. 31 to 33/Ind/1994 for asst. yrs. 1985-86 to 1987-88 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in WTA Nos. 44, 48 and 49/Ind/1992, for our opinion : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the lease agreement dt. 21st Oct., 1993 though unregistered was genuine ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to accept the lessee's interest as shown by the assessee ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to assess the lessee's interest in the land in the hands of Smt. Pushpa Garg ?' (b) IT Ref No. 25 of 1995: At the instance of CWT, Bhopal, the Tribunal stated the case and referred the under noted question under s. 27(1) of the WT Act on applications registered as R.A. Nos. 39 of 41/Ind/1994 for asst. yr. 1985-86 to 1987-88 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in WTA Nos. 54, 46 and 47/Ind/1992, for our opinion : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the lease agreement dt. 21st Oct., 1983, though unregistered was genuine ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to accept the lessee's interest as shown by the assessee ? (iii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to assess the lessee's interest in the land in the hands of Smt. Rajni Baheti ?" (c) IT Ref. (iii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to assess the lessee's interest in the land in the hands of Smt. Rajni Baheti ?" (c) IT Ref. No. 1 of 1996 At the instance of CWT, Bhopal, the Tribunal stated the case and referred the under noted questions under s. 27(1) of the WT Act on applications registered as R.A. Nos. 25 to 29/Ind/1994 for asst. yrs. 1984-85 to 1988-89 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in WTA Nos. 69 to 73/Ind/1992, for our opinion : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the lease agreement dt. 21st Oct., 1983, though unregistered was genuine ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to accept the lessor's interest as shown by the assessee ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in apportioning the lessor's interest and lessee's interest and in directing to assess the lessee's interest in the land in the hands of Smt. Pushpa Garg ? (d) IT Ref. No. 2 of 1996 : At the instance of CWT, Bhopal, the Tribunal stated the case and referred the under noted questions under s, 27(1) of the WT Act on applications registered as R.A. Nos. 34 to 38/Ind/1994 for asst. yrs. 1984-85 to 1988-89 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in WTA Nos. 49 to 53/Ind/1992, for our opinion : (i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the lease agreement dt. 21st Oct., 1983, though unregistered, was genuine ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the AO to accept the lessor's interest as shown by the assessee ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in apportioning the lessor's and lessee's interest and in directing the AO to assess the lessee's interest in the land in the hands of Smt. Rajni Baheti ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in apportioning the lessor's and lessee's interest and in directing the AO to assess the lessee's interest in the land in the hands of Smt. Rajni Baheti ? " (e) IT Ref No. 24 of 1995 At the instance of CGT, Bhopal, the Tribunal stated the case and referred the under noted question under s. 26(1) of the GT Act, 1958 (for short 'the GT Act') on application registered as R.A. No. 30/Ind/1994 for asst. yr. 1984-85 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in GTA No. 1 and C.O. No. 38/Ind/1992, for our opinion : 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no gift-tax is exigible in the hands of the assessee and in cancelling the gift-tax assessment ? (f) IT Ref. No. 26 of 1995 At the instance of CGT, Bhopal, the Tribunal stated the case and referred the under noted question under s. 26(1) of the GT Act on application registered as R.A. No. 24/Ind/1994 for asst. yr. 1984-85 arising out of the order dt. 25th Oct., 1993, rendered by the Tribunal in GTA No. 2/Ind/1992, for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no gift-tax is exigible in the hands of the assessee and in cancelling the gift-tax assessment ?" 3. We have heard Shri AM Mathur, learned senior counsel with Shri Vivek Sharan, for the applicant/Department and Shri PM Choudhary, learned counsel for the non- applicant/assessee, in these cases. 4. The counsel for the parties are one on the point that basic question in the first four reference cases is whether or not the lease agreement in question is genuine and other questions, as proposed in each case, are consequential to the conclusion on this basis question? They also submitted that exigiblity or otherwise of gift-tax is also dependent on the answer to the aforesaid basic question. 5. The counsel for the applicant submitted that the Tribunal committed an error in rendering orders in the aforesaid appeals in favour of the assessees and against the Revenue. They also submitted that exigiblity or otherwise of gift-tax is also dependent on the answer to the aforesaid basic question. 5. The counsel for the applicant submitted that the Tribunal committed an error in rendering orders in the aforesaid appeals in favour of the assessees and against the Revenue. The counsel for the non-applicants, on the other hand, contended that the orders are on firm foundation manifesting no error, infirmity or perversity. According to him the finding about lease dt. 21st Oct., 1983, is correctly recorded on proper consideration of ss. 17 and 49 of the Registration Act and s. 53A of the Transfer of Property Act. In pursuit the counsel submitted that the finding rests on the linchpin of appreciation of facts and evidently gives no rise to question of law as such. He further submitted that other questions, like computation of lessor's interest or lessee's interest in the hands of Smt. Pushpa Garg or Smt. Rajni Baheti are consequential and dependent on the finding recorded with regard to lease dt. 21st Oct., 1993. He also urged that gift-tax assessments are rightly cancelled and the orders in this regard are also based on proper appreciation of facts. 6. True it is that proper finding, based on proper appreciation of facts, as held in CIT vs. Ashoka Marketing Ltd. 1976 CTR (SC) 238 : (1976) 103 ITR 543 (SC) and in CIT vs. Kotrika Venkataswarny & Sons (1971) 79 ITR 499 (SQ) .. 8, does not give rise to any question of law. The apex Court in Dudb Nath Pandey (dead by LRs) vs. Suresh Chandra Bhattasali (dead by LRs) AIR 1986 SC 1509 has held that even finding on question of limitation is a question of fact, not of law. 7. In CIT vs. Daulatram Rawatinull (1964) 53 ITR 574 (SC) it is held that this Court has no power to call upon the Tribunal to state the case "if there is some evidence to support the finding recorded by the Tribunal". Rules, governing references, are indicated by the apex Court as under : "(i) When the point for determination is a pure question of law such as the construction of a statute or document to title, the decision of the Tribunal is open to reference the High Court under s. 66. Rules, governing references, are indicated by the apex Court as under : "(i) When the point for determination is a pure question of law such as the construction of a statute or document to title, the decision of the Tribunal is open to reference the High Court under s. 66. (ii) When the point for determination is a mixed question of law and facts, while the finding of the Tribunal on the facts found is final, its decision as to the legal effect of those findings is a question of law which can be reviewed by the High Court. (iii) A finding on a question of fact is open to attack under s. 66(1) as erroneous in law when there is no evidence to support it or if it is perverse. (iv) When the finding is one of fact, the fact that it is itself an inference from other basic facts will not alter its character as one of fact." 8. In the instant case, construction of a statute or document of title is not involved. the question is not one of effect but is about genuineness only. Legal effect is also not in dispute and hence it is not a mixed question of law and fact either. Absence of evidence is also not the contention. 9. The only emphasis is that lease agreement is erroneously held as genuine. As the Tribunal has stated the cases, we have perused the record and orders. We find that the Tribunal reached the correct conclusion. That finding does not suffer from vice of vitiation. In B.K. Karemore vs. Govind AIR 1974 SC 405 , it is held that : "Before a finding of fact by a trial Court can be set aside it must be established that the Trial Judge's findings were clearly unsound, perverse or have been based on grounds which are unsatisfactory by reason of material inconsistencies or inaccuracies." 10. The Tribunal also considered the impact of ss. 17 and 49 of the Registration Act. It also took into account rights available under s. 53A of the Transfer of Property Act. It cannot be gainsaid that even in the absence of registration, were necessary (sic), collateral purposes can be seen and appreciated. In our view registration is not the only factor as regards genuineness of document. In fact there had been cases where a document is impeached despite registration. It cannot be gainsaid that even in the absence of registration, were necessary (sic), collateral purposes can be seen and appreciated. In our view registration is not the only factor as regards genuineness of document. In fact there had been cases where a document is impeached despite registration. In the instant cases we find that there is material on record to support and sustain the finding about genuineness of the lease agreement dt. 21st Oct., 1983. In view of this position, we find that the Tribunal was justified in directing the AO to accept the lessor's interest, and to assess the lessee's interest by apportionment between the interests, of the lessor and the lessee and to assess lessee's interest in the land in the hands of Snit. Pushpa Garg and Smt. Rajni Baheti. The counsel for the applicant is unable to point out any error with regard to these questions as well. 11. No unsoundness, inconsistency or inaccuracy is pointed out before us. 12. No infirmity or perversity is pointed out in regard to consequential and dependent questions as extracted above. 13. As regards questions relating to gift-tax, we find that decisions CGT vs. Indo Traders & Agencies (Madras) (P) Ltd. (1981) 131 ITR 313 (Mad) and CGT vs. Om Prakash (1992) 198 ITR 581 (All) clinch the issue against the Revenue. It is initial and futile to spin and structure transactions in question as "deemed gifts" and to foist and fasten the liability of gift-tax in such a conjectural manner. In our appreciation, we find that no element of deemed gifts is visible and thus hold that the Tribunal reached and recorded correct conclusion in favour of the assessee. 14. In view of the aforesaid position, we find that the Tribunal was justified in deciding the appeals as it did. Accordingly we answer all the aforesaid questions in the affirmative i.e. in favour of the assessee and against the Revenue. Avoidance of tax is not tax evasion. One may arrange affairs as to reduce burden and brunt. 15. We, however, make no orders as to costs. 16. Counsel-fee for each side in each case is, however, fixed at Rs. 750, if certified. 17. Transmit a copy of this common order to the Tribunal. 18. Retain this order in the record of IT Ref. One may arrange affairs as to reduce burden and brunt. 15. We, however, make no orders as to costs. 16. Counsel-fee for each side in each case is, however, fixed at Rs. 750, if certified. 17. Transmit a copy of this common order to the Tribunal. 18. Retain this order in the record of IT Ref. No. 22 of 1995 and place its copy each in the records of connected Income tax References, as particularised above, for ready reference.