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Commissioner Of Income-Tax vs Al. Ramanathan on 12 December, 1998

Held, that the dispute arose in the family and the family arrangement was arrived at in consultation with the panchayatdars and, accordingly, re-alignment of interest in several properties resulted. The family arrangement was arrived at in order to avoid continuous friction and to maintain peace among the family members. The family arrangement was governed by the Principles which were not applicable to dealings between strangers. So such re-alignment of interest by way of effecting family arrangements among the family members would not amount to transfer. The Tribunal found that the family arrangement was a bona fide one in as much as it was made voluntarily and not induced by any fraud or collusion and the conduct of the parties was consistent with the bona fide family arrangement particularly when it was arrived at in the present of panchayatadars. The family arrangement involved in the above case did not amount to transfer. Therefore, no capital gains arose.
Madras High Court Cites 6 - Cited by 16 - R J Babu - Full Document
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