Dear Sir,
Having read the brief facts, I am of the following preliminary view:
Courts in India have taken a very liberal and broad view of the validity of the family settlement and have always tried to uphold it and maintain it. In one such famous case, the Supreme Court had observed that Courts give effect to a family arrangement upon the broad and general ground that its object is to settle existing or future disputes regarding property amongst members of a family.
Family settlement/arrangement is a conciliatory and a pacific mean of division of property and if by consent of parties, the matter has been settled, it should not be allowed to be reopened by the parties to the agreement on frivolous or untenable grounds.
However, family arrangement should not be entered into with an object of escaping tax. It then becomes a fraud. The unparalleled intent of family arrangement is fortification of family vanity, unanimity and tranquility. So, if one aims family settlement or arrangement as a device to save tax it would certainly cast a cloud on the authentic and genuine parties of the whole transaction.
Therefore, it is all the more important to strengthen the documentation of family arrangement in line with the above ingredients. Otherwise, the litigation within the family may be extended to the various revenue departments also.
Trust this would suffice.
Thanks & regards.
Rabin Majumder
Advocate & Attorney
For NuDelhiLawFora
At:
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