COMMISSIONER OF GIFT TAX Vs. I P SONI

JUDGEMENT

(1.) FACTS: On 12-7-63 Shri ) I. P. Soni respondent executed a gift deed in favour of his son, M.M. Soni (respondent in I.T P. 10/76, 133/74, 139 and 139A/78). By the said gift-deed he conveyed and granted to his son "all that plot of land situated at Jor Bagh, plot No. 230, Block No. 172, New Delhi owned and possessed by me, free from encumbrances, as a sole and absolute leasee, leased out to me by the Chief Commissioner, Delhi on 3-12-56......... together with trees, rights easements". I.P. Soni filed a gift tax return on 2-11-64 declaring the above gift and valuing the same at Rs. 33,195.00 . The gift-tax Officer found that on the date of the gift a house had been constructed on the plot of land in question by the donor with his own finances. A question, therefore, arose as to whether the gift made on 12-7-63 was only a gift of the plot of land and not of the super-structure as claimed by the assessee. Gift-tax officer held that the whole of the building and the plot had been gifted by the assessee i.e. I. P. Soni to his son M. M. Soni. He completed the gift-tax assessment accordingly. The order of gift-tax Officer was confirmed by the Appellate Assistant Commissioner. But on further appeal the assessee was successful. The Tribunal did not accept the contention of the department that under the document it was intended that there was to be a transfer to the donee also of the building which had been constructed on the plot by the donor prior to the date of the gift.

(2.) At the instance of gift-tax Commissioner G. T, R. No. 73 following question was referred to this court for its opinion :- Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the transfer of the plot does not automatically involve the transfer of the super-structure thereon ?

(3.) Answering the question in the negative It was held that the question has to be answered in the light of the provision of the Transfer of Property Act and in particular Section 8 thereof. Held further that where a person conveys a plot of land and there is in existence a building on the plot of land, the transfer of the land would also convey to the transferee all the interests of the transferor in the building standing on the land, unless, as Section 8 directs, a different intention is either expressed or necessarily implied (P.C 30 I A. 71, 1927 Oudh 240, 1959 Kerala 294 and 1968 S.C. 612 at p. 641 referred to). Considering the circumstances of the case it was held that in the present case the deed of gift conveyed to the donee not merely the interest in the land in question but also the interest of the donor in the house property standing thereon on the date of the gift. Consequently it follows that entire income from the house property subsequent to the date of the gift has to be assessed in the hands of the donee.