1. At the instance of the Revenue, the following questions have been referred by the Tribunal under s. 64(1) of the E.D. Act :
'(1) Whether, on the facts and in the circumstances of the case and on a proper construction of annexures 'A' and 'B', there were gifts of Rs. 31,000 and Rs. 51,000 respectively on May 28, 1952, and December 16, 1954 ?
(2) If the answer to the above question is in the affirmative, whether the provisions of section 10 could be applied in respect of the said sums of Rs. 31,000 and Rs. 51,000 by reason only of their having been invested in the partnership in which the donees and the deceased were partners under annexure 'C' ?'
2. Reference arises out of E. D. assessment consequent of the demise of one Shri Puranmal Gattani on February 17, 1961. He was a self-made man carrying on business and acquired properties without the aid of any ancestral nucleus. On May 28, 1952, he gave a sum of Rs. 31,000 to one of his sons, Shri Narayandas, who, on receipt of the amount, executed a document styled as relinquishment deed on a stamp paper of Rs. 500. The schedule attached to that document refers to several immovable properties and so also cash of Rs. 7,000 as the movable property in respect of which the relinquishment has taken place.
3. On December 16, 1954, Puranmal gave a sum of Rs. 51,000 to his another son, Shri Vallabhdas. Ornaments of the value of Rs. 6,000 were also given. After receipt of the cash amount and the ornaments, a document styled as relinquishment deed dated December 16, 1954, in respect of the very same property was executed. The next date of relevance in order of time is 1st February, 1955, when a partnership deed was executed between the father and his two sons. The deed contains a clause providing for the contribution of capital by the partners as and when required. The it further contains the stipulation for a charge of interest at certain rates, with which we are not concerned. The partnership was made effective from 23rd December, 1954.
4. In the E.D. assessment, consequent on the demise of Shri Puranmal, the question arose as to whether the sum of Rs. 31,000 and Rs, 51,000 paid to the two sons under the circumstances was includible as estate of the deceased. The Asst. CED held that the aforesaid properties were liable to be included in the assessment because of the provisions of s. 10 of the E.D. Act. This was based on the reasoning that the deceased had gifted the property and was not entirely excluded from their enjoyment because the said amount has been invested in the partnership in which the deceased was also a partner.
5. In an appeal carried at the instance of the accountable person, the Appellate Controller confirmed that decision and, consequently, the accountable person filed a second appeal before the Tribunal. Accepting the contention raised on his behalf that under the circumstances the transaction was not a 'gift' at all, the appeal came to be allowed. On the second question, however, the Tribunal held in favour of the Revenue.
6. Inasmuch as on the first question itself the Revenue lost, an application was filed for making a reference to the High Court and that is how the matter is before us. After hearing the learned counsel for the Department as well as the assessee, it seems to us that the transaction evidenced by the two documents styled as relinquishment deeds cannot fall within the definition of the term 'gift'. As everything turns on the documents and there is no oral evidence, it will be worthwhile noticing certain salient features embodied in the same. Not that the caption of the document is conclusive of the matter, but the styling of the document in a particular manner can also have a significance to judge the real nature and the true import of the agreement between the parties. We have already mentioned that these two documents are styled as relinquishment deeds. Further, there is a recital 'this whole property is self acquired' The document proceeds to mention that there have been disputes between the parties regarding the earnings, and as a result both the father and the sons were not in a position to live in peace. With a view to demonstrate their capacity to earn, the sons demanded and the father agreed out of a sweet will, but with a condition attached, to give to the two sons the amounts mentioned above. The second document of relinquishment dated 16th December, 1954, contains the following recitals :
'Considering my request and according to your sweet will you agreed to give Rs. 57,000 with condition that I relinquish all my right over other property.'
7. Not that the nature of the property relinquished has any direct bearing on the question but it will be worthwhile noticing that the two house properties referred to in the above deeds are not the whole of the properties, but half of the share of deceased Puranmal in the said property.
8. Now, the concept of gifts is that it has to be without consideration whatsoever excepting the consideration of love and affection in certain cases. The moment it is demonstrated that there is some consideration for the transfer, the transaction will be anything but a gift. The consideration can be the settling of a future probable dispute or even getting an admission from the part which will preclude the raising of a dispute. The Tribunal considering this principle about 'gift' has arrived at a conclusion that there is a certain amount of mutuality in the transaction and that it was not without consideration, the consideration being, to put the affairs beyond the pale of controversy by obtaining the deed of relinquishment and giving them funds so as to enable them to start their own business. In the background and under the circumstances and keeping in view the recitals in the two documents, it seems to us that the view taken by the Tribunal is unassailable and a cogent reasoning has been given in support of the finding that the transactions could not be termed as gifts. We are in complete agreement with the view taken by the Tribunal. In the view that we are taking, the second question does not arise for consideration.
9. In the result, we answer question No. 1, in the negative and against the Revenue. As far as the second question is concerned, no answer is given as it is not necessary. Assessee to get the costs of this reference from the Revenue.