This is appeal filed by Haji M. Abdul Razack Saheb, Dharmavaram objecting to order of AAC, Anantpur in respect of gift-tax assessment for assessment year 1972-73. 2. assessee is individual and had settled certain properties to his wife and sons by oral gift. After allowing exemption in respect of gift to wife and basic exemption of Rs. 5,000 taxable gift was computed by GTO at Rs. 1,27,780 by order dated 26-3-1979 overruling assessee's objection that n o taxable gift is involved. He had, however, allowed Rs. 20,000 as claims of sons against donor for services rendered by them. assessee had filed appeal before AAC and this was pending. meanwhile, Commissioner of Income-tax acting under his powers under section 24(2) of Gift-tax Act, 1958 ('the Act') was of view that allowance of Rs. 20,000 was prima facie wrong on ground that services so rendered were not amenable for proper and certain valuation in money or monies worth. It was for this reason that he considered order erroneous and prejudicial to interests of revenue. However, he did not enhance assessment but only set aside same by his order dated 4-3-1981 with direction to redo same after hearing assessee considering all evidence. It was for this reason that assessee had not come up in appeal against Commissioner's order. first appellate authority also did not deal with assessee' appeal questioning inference of gift itself. He had also not taken up alternative ground for higher allowance. he considered appeal itself to be infructuous as assessment itself had been set aside. He, accordingly, dismissed appeal by his order dated 10-8-1981 on ground that appeal is 'rendered redundant'. 3. GTO thereafter proceeded to redo assessment. He completed same on 12-2-1982 on same value rejecting assessee's claim that it was only family arrangement and not gift. he withdrew deduction of Rs. 20,000 originally allowed for same reasons stated by Commissioner in his order. It is this second assessment which is now subject matter of dispute before us. 4. assessee took up this second assessment again in first appeal. first appellate authority recorded assessee's arguments but considered himself incompetent to deal with this appeal. Though original assessment h d been merely set aside, he was of opinion that Commissioner's finding that alleged services rendered by sons could not be evaluated was binding on him. though Commissioner had not gone into assessee's claim that there was no gift but only family arrangement, he did not deal with this aspect of question also but had merely dismissed assessee's appeal in toto. However, he had given his opinion that assessee could contest matter before Tribunal. assessee is, therefore, in second appeal. 5. In second appeal, learned counsel points out that first appellate authority was mistaken in what he did. original assessment having been only set aside, first assessment was entirely before him. As for merits he reiterated consistent claim that it was only family arrangement. He pointed out to letters addressed to Tehsildar and Municipal Commissioner where in assessee had clearly stated circumstances under which arrangement was made. According to him facts which are undisputed would lead to inference that there was only family arrangement. He claimed that it i s well established that mere family arrangement cannot give rise to gift. Alternatively he argued that sons had done work for several years for assessee without any remuneration and they were not bound to serve assessee without salary. Hence assessee was bound to remunerate them adequately. Accordingly monies they received merely compensated them for their services and that there was no gift even for this reason inasmuch as there was consideration for transfer. He contended that consideration was also adequate. As further alternative, he pleaded that allowance originally granted by GTO was itself inadequate and that suitable deduction should be allowed to offset element of remuneration involved in arrangement. 6. learned departmental representative relied upon orders of authorities below. He pointed out that properties were admittedly with assessee long prior to alleged engagement of his sons in business. Hence there is no question of their having any prior right over them. In fact such claim was also never made. Since there was never any dispute or claim by sons to property, there was, according to him, no possible inference of family arrangement. He further contended that there was also no case for allowance of any amount as remuneration to sons for reasons stated b y Commissioner that this could not be evaluated in money or monies'. worth. Even otherwise, he argued that they were young and that amount, if at all, could only be negligible. 7. We have carefully considered records as well as arguments. it is assessee's case that he was going on Haji pilgrimage just before settlement. He has two sons and four daughters. All daughters were married at relevant time. One son was also married by this time. Both sons did not have higher education. Even in their teens they joined assessee's business. No remuneration was specified or claimed. But there was always understanding that they should be compensated. assessee's wife was T. B. patient for long time. assessee, therefore, went alone. There was compelling reason that he should, therefore, settle right to properties so that there should not be any dispute. He, therefore, distributed properties to his wife n d two sons. He had informed Tehsildar and Municipal Commissioner accordingly. These are facts which have been stated in petitions addressed to them. He has categorically stated in these letters 'both sons have co-operated with me and lent their might in management of business and improvement of property. It is on basis of this sentence that assessee's claim largely rests apart from other circumstances mentioned herein before. facts stated in this paragraph are facts urged all along and have not been disputed. Our decision has to rest on these facts. 8. As regards liability relating to gift-tax vis-a-vis family arrangement, we should imagine, even as pointed out by learned counsel, that there could not ordinarily be inference of gift in family arrangement. In order to presume deemed gift in family arrangement there should, normally, be element of bounty which is not present in family arrangement. This Tribunal had occasion to consider law on subject in Smt. A. Omera Parvez v. GTO [1983] 3 ITD 250 (Mad) to which one of us was party. it was pointed out therein that Supreme Court in case of Sahu Madho Das v. Pandit Mukund Ram [1955] 2 SCR 22 had held that family arrangement is based on assumption that there is antecedent title on part of parties and arrangement merely there is antecedent title on part of parties and arrangement merely acknowledges and defines what that tile is. This decision, it was pointed out, has been relied upon by Madras High Court in case of CGT v. Pappathi Anni [1981] 127 ITR 655 which held that even where property rights were assigned to party who did not have share in same, there was no element of gift in such family arrangement between parties because bona fide belief that there was right constituted adequate consideration and took it out of gift-tax liability. It was this reason that this Tribunal in case allowed assessee's claim that there was no gift. But having accepted legal position stated by learned counsel, we find ourselves still unable to accede to his claim because factual foundation for establishing claim that it is simple family arrangement has not been laid. sons had never acquired or claimed any right in these properties themselves. In fact they were all inherited by assessee and were owned and enjoyed by him well before sons were born or were engaged in assessee's business. It is not any one's case that properties had to be given because they had right or claim over them their right was right, if any. sons were also never active parties to assessee's arrangement. It is reasonable to presume that they would have been parties, if arrangement was intended to silence them as regards any dispute over title. There is also no material brought on record by assessee at both stages of assessment (original as well as second) or various appeals in proceedings before AAC (twice), Commissioner of Income-tax and Tribunal on this point. There is not even statement on behalf of sons stating that they had staked their claim to title or that it was arrangement to settle family dispute. There is not iota of evidence which would justify inference that there has been any family 'arrangement'. Hence, this claim of assessee has to fail. 9. conclusion in preceding paragraph brings us to assessee's alternative claim that sons had right for remuneration for services rendered by them to assessee in his business and that to this extent, there has been consideration. We have first to ascertain whether there is such right. We should imagine that unlike Hindu families where sons may be expected to assist father without any specific remuneration because they already have pre-existing right in family business conducted by father, there is no such obligation or expectation on part of assessee's sons since they are not Hindus. In fact, revenue itself had not seriously disputed that they had such right to be remunerated. ITO in original assessment had recognised such right and he valued same at Rs. 20,000. Commissioner has interfered with his order only because he was of view that such services' are not amenable for proper and certain valuation in money or monies' worth. It was for this reason only that he questioned allowance and considered order to be adverse to revenue. facts themselves had not been questioned allowance and considered order to be adverse to revenue. facts themselves had not been questioned. Even to this inference of Commissioner that services cannot be measured, assessee had objected. Commissioner did not give and specific finding on assessee's objection but had merely set aside assessment sos that assessee could be heard further on matter. This only shows that initial inference that services cannot be measured was only tentative for purpose of his jurisdiction. We are also not in position to agree with him that services rendered by person would not be amenable to valuation in money or monies' worth. If it were so, no person who takes up services without salary terms being agreed to will be entitled to remuneration. We have no doubt reasonable salary cannot be denied for service rendered merely because their is no prior agreement as regards amont of salary. There may be difficulty in valuation, but that does not mean that it cannot be valued at all. In fact ITO himself had also valued it at Rs. 20,000 in original assessment. Such valuation involved estimate or approximation. But that does not mean that valuation cannot be made at all or that mere difficulty in valuation should come in way of recognition of legal right of sons to remuneration or father's obligation to remunerate them. It may be that in view of close relationship, they had not chosen to stipulate salary or had no intention to treat matter in legal terms. But that does not mean that sons had no right. We have to find that they had such right to receive remuneration for service rendered. fact that their services had been specifically mentioned in letters written by assessee prior to his departure on Haj pilgrimage clearly suggested that it was certainly matter which weighted with assessee. He had categorically stated even as noticed earlier 'both sons have co-operated with me and lent their might in management of business and improvement of property.' assessee had made this statement at time when gift-tax liability was probably unanticipated. If he had, he would have probably taken greater care to avoid liability altogether or to have its impact reduced. statement, in our opinion, clearly indicates obligation on his part to his sons for services rendered by them. We are also of opinion that his right is actionable one and should be evaluated and considered as consideration to extent of the value of such right. It cannot be treated as full consideration because gift-tax law has its own definition of 'gift' in section 4 of Act. Where consideration is not equal, difference can be deemed to be gift. In this case, there is no dispute as to value of properties received by sons. value is Rs. 1, 26,781. As for right of sons, they were aged only 20 and 19 at relevant time. GTO in original assessment had found that sons had worked for four and three years respectively. assessee had claimed salary of Rs. 500 per month on average so that amounts of Rs. 12,000 and Rs. 8,000 aggregating to Rs. 20,000 would represent value of such right. We are of view that average of rs. 300 per month in case of each of sons for entire period can be treated as reasonable remuneration. This would mean that amount eligible for deduction would be Rs. 25,200 as against Rs. 20,000 in original assessment. Needless to say that assessee will be further eligible for basic exemption. 10. In result, appeal is partly allowed as above. *** HAJI M ABDUL RAZACK SAHEB v. GIFT-TAX OFFICER