SOMPAL GUPTA Vs. CIT

JUDGEMENT

(1.) Present appeal filed under Section 260-A of the Income Tax Act against the order dt. 25-2-2004 passed by the Income Tax Appellate Tribunal, New Delhi has been admitted on the following substantial questions of law:

(2.) We have hard Sri Suyash Agarwal, learned counsel for the appellant and Sri A.N. Mahajan, learned Senior Standing Counsel, Income Tax Department.

(3.) Sri Suyash Agarwal learned counsel relying on the Boards circular dt. 27-3-2000 submitted that the Department could not have preferred an appeal before the Tribunal as the tax effect was less than one lac. However after scrutiny we find that the addition which was made by the Assessing Officer and deleted by the Commissioner of Income Tax (Appeals) was subject matter of challenge in appeal preferred by the Revenue the tax effect was Rs. 1,36,099. That being the position as the tax effect was more than one lac there is no prohibition on the right of the Department for filing an appeal and the Boards circular dt. 27-3-2000 would not be attracted in the present case. On merits of the case Sri Suyash Agarwal placed reliance on memorandum of agreement of family settlement dt. 17-3-1994 entered into between the assessee and his brother. The said memorandum finds place at page 18 of the memo of appeal as Annexure 2. From a reading of the aforesaid memorandum we find that on account of family settlement entered into between the assessees wife and her brother who belongs to Bindal family the assessee will relinquish his one fourth share in Muzaffarnagar property on the stipulation that members of Bindal family had constructed a house at Meerut. It has come on record that no such house has been constructed by the members of Bindal family at Meerut pursuant to the family settlement entered into between the assessees wife and her brother. Clause 2 of the agreement which is one of the term and condition of the family settlement reads as follows: