TMI Blog1971 (1) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... case, and in terms of the settlement deed dated 24th August, 1963, there was a tenable gift of Rs. 17,757 in favour of the assessee's sons ? The material facts are: During the previous year relevant to the assessment year 1964-65 the assessee, an individual, had executed a deed of settlement on 24th, August, 1963, whereby he settled certain lands obtained by him in the family partition between him and his son. The assessee himself was the first beneficiary till his lifetime and thereafter his wife was to enjoy the settled properties till her lifetime without any power of alienation and finally they should go to his son with absolute rights. The value of the lands gifted by the assessee was shown as Rs. 42,935 which was not in dispute. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciaries. He relied upon the decision of the Bombay High Court in Commissioner of Gift-tax v. G. G. Morarji in support of his plea. This claim of the assessee is resisted by Sri P. Ramarao, the learned standing counsel for income-tax department, contending, inter alia, that the transfer of the property in favour of the son is a gift within the meaning of section 2(xii) and the same has been rightly taxed in the instant case. In order to appreciate the respective contentions, it is necessary to refer to the definition of "gift" in the Act. Section 2(xii) which defines "gift" reads thus : "gift" means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "gift" under the Act. The definition of "transfer of property" under clause (xxiv) of section 2 is of very wide import, unlike the definition in section 122 of the Transfer of Property Act. The acceptance of gift by a donee or some one on his behalf does not appear to be a specific requisite condition for a gift under the Act. There must be two persons : One, the transferor, i.e., the donor, and the other, transferee, i.e., the donee. The transaction must relate to an existing movable or immovable property. It must have been made voluntarily and without any consideration in money or in money's worth. It takes in deemed gifts specified in section 4. In the light of the aforesaid discussion, we shall examine the present question. The gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y when the document was executed and the right has accrued to him, though his right to possess and enjoy the property was postponed to a later date. As pointed out earlier, the transfer of property under the Act is of wide import so as to take in the grant or creation of an interest in the property. (See section 2(xxiv)(b) of the Act) In the circumstances, we are clear in our mind that the Appellate Tribunal was perfectly right and justified in law in holding that the transfer of interest in the settled properties in favour of the son amounts to gift taxable under the Act. In Commissioner of Gift-tax v. G. G. Morarji, on which reliance has been placed by Sri K. B. Krishnamurthy, the question for decision was whether, on the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apart, we express our respectful dissent from such a view. The son of the assessee in the instant case has really got a vested right under the document and a right to possess and enjoy the property with absolute rights after the death of his father and mother, although there is postponement of his right to enjoy the property. None the less there was a transfer of property or interest in immovable property belonging to the donor, the assessee, on the date of the document itself and for all practical purposes, it is a gift within the meaning of section 2(xii) of the Act. For all these reasons, we are of the view that the question should be answered in the affirmative and against the assessee, who shall pay the costs of this reference to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
