Miss Anjali Goel vs Income Tax Officer on 27 May, 2002
Likewise the decision of Chintan N. Parikh's case (supra) relied upon by learned authorized representative has different facts. In this case the Hon'ble Gujarat High Court was dealing with some what different facts. There was a joint family which comprised Karta, wife and son. This HUF was partitioned. On partition the son received one bungalow. Later on he executed a trust deed whereby the properties received in partition were settled upon a trust. The said son retained life interest in the said property which he had received on partition. However, by creation of a trust settled upon beneficiaries being two sons; have sold their respective interest in the property for a consideration of Rs. 1,76,000 each and claimed that no capital gain was chargeable under Section 45. While dealing this issue in the background of these facts Hon'ble Gujarat High Court has opined that the interest of the assessee was contingent when the trust deed was executed and the assessee has acquired the rights in the remainderman's interest only on the death of their mother. From the time when the trust deed was executed till their mother expired the right of the assessee was only contingent. Thus, it was held that not only was there no previous owner as the right although contingent, had come into existence only on the execution of the trust deed, but there was no conceivable cost of acquisition. Further, it was opined that even applying the provisions of Section 49(1), the backward chain would snap at the settlor and it was not possible to conceive a cost in the hands of the settlor. The Hon'ble High Court in clear terms mentioned that if the asset was "created" by the settlor the cost of acquisition (creation) has to be ascertained in the hands of the settlor. There was no material on record to establish this cost, [stress given by us by underlining (italicised in print) the relevant portion). Therefore, this view of the Hon'ble Court clearly reflects that where a settlor has created an asset then the cost can be ascertained. Since in the present appeal before us the amount settled by the settlor was ascertainable and later on the same was improved and increased by further contribution of the assessee's capital received as beneficial interest out of which the investment had been made for acquiring the said property. Therefore, firstly the reliance placed by learned authorized representative is illogical and secondly the observation of Hon'ble Gujarat High Court supports the view expressed by us hereinabove.