TMI Blog1985 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... l mistake). The water receipts, electric receipts and bills are in the name of Smt. Premlata, donee, the wife of the assessee. Smt. Premlata has let out the building (said outhouses) to the Appellate Assistant Commissioner of Income-tax, A range, Jaipur, a Rs. 800 per month with effect from June 1, 1967. The repairs and alterations are also being done by Smt. Premlata, donee, and Smt. Premlata Nawalkha was assessed to wealth-tax on the value of outhouses. Since September 30, 1966, Smt. Premlata is in possession of the property, exercising her rights as owner and also receiving rent, whereas the rental income from these houses was assessed in the hands of the assessee in view of section 64 of the Income-tax Act treating it as transfer by the assessee to his spouse. On the basis of the aforesaid facts, it was argued by the assessee before the Gift-tax Officer, vide his letters dated September 22, 1969, and December 22, 1969, that for the purposes of the Gift-tax Act, the gift was valid even though the declaration dated October 10, 1966, was not registered as required by section 17 of the Registration Act and section 123 of the Transfer of Property Act and reliance was placed on G. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......... Similarly, in section 2(XI), " firm " has the same meaning as assigned to it in the Indian Partnership Act. In section 2 (xvib), " legal representative" has the meaning assigned to it in clause (11) of section 2 of the Civil Procedure Code. Similarly, in section 2(xvii), " partner " has the meaning assigned to it in the Indian Partnership Act and includes ......... Section 2(xx) defines " previous year " in relation to any assessment year...... under the Income-tax Act, whereas " gift " has been defined under section 2(xii) as under: " `Gift' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth .............." The word " transfer " has not been defined, but " transfer of property has been defined as under : (xxiv) ` transfer of property ' means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes ........" Thus, it is obvious that the Legislature did not adopt the definition of gift from the Transfer of Property Act as has been done in other case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the definitions of gift 'and transfer of property' under the Transfer of Property Act and the Gift-tax Act are quite different and the Gift-tax Act has not incorporated or borrowed the definition of these two phrases from the Transfer of Property Act. A gift which may be imperfect, invalid or void under the Transfer of Property Act may be valid gift for the purposes of the Gift-tax Act if it falls within the definition of the word " gift " given in the Gift-tax Act. Section 4 of the Gift-tax Act is a deeming provision which includes certain transfers as gifts for the purposes of the Gift-tax Act and runs as under: "4. Gifts to include certain transfers.-(1) For the purposes of this Act (a) where property is transferred otherwise than for adequate consideration, the amount by which the market value of the property at the date of the transfer exceeds the value of the consideration shall be deemed to be a gift made by the transferor : Provided that nothing contained in this clause shall apply in any case where the property is transferred to the Government or where the value of the consideration for the transfer is determined or approved by the Central Government or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther provision of this Act or any other law for the time being in force, for the purpose of computation of the taxable gifts made by the individual, the individual shall be deemed to have made gift of so much of the converted property as the members of the Hindu undivided family other than such individual would be entitled to, if partition of the converted property had taken place immediately after such conversion." Therefore, we see that the definition of gift is much more wider, exhaustive and extensive in the Gift-tax Act. It will include several transactions like easement or if inadequate price is paid or as given in section 4 above. It is not necessary that one can become owner of a property only by registered instrument, for, as we see in a case of adverse possession that one becomes the owner without any registered document and as we have seen the facts of the present case, that Smt. Premlata was delivered the actual physical possession of the said property on September 30, 1966, and since then she is exercising her rights as an owner without any interruption or objection. She has given the outhouses on rent, been receiving the rent, making repairs, alterations and has got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh High Court that the partition of a Hindu undivided family does not involve transfer of any property or right to or interest therein, but only adjustment of proprietary rights into specific shares. It further held that throwing of self-acquired property into joint family property amounts to transfer of property and does not cease to be a " transaction " within the meaning of section 2(xxiv)(d) of the Gift-tax Act simply because it is unilateral in nature, and further for this purpose placed reliance on Satyanarayanamurthy's case [1965] 56 ITR 353 (AP) which was overruled by the Supreme Court in Goli Easwariah v CGT [1970] 76 ITR 675 (AP) and they have dissented from the decision of the Mysore High Court in Laxmibai Narayana Rao Nerlekar v. CGT [1967] 65 ITR 19. Their Lordships of the Andhra Pradesh High Court further held that there is no provision in the Gift-tax Act like section 123 of the Transfer of Property Act requiring an instrument of gift of immovable property to be registered and attested by at least two witnesses. Considerations arising from the definition of gift in the Transfer of Property Act must not be imported while construing the provisions of the Gift-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to unilateral act. We have gone through the judgment of the Supreme Court carefully. Nowhere their Lordships of the Supreme Court have made any observation whatsoever with regard to the last proposition of the Andhra Pradesh High Court. Laxmibai Narayana Rao Nerlekar v. CGT[1967] 65 ITR 19 (Mys) has also held that the act of throwing self-acquired property of the assessee into the common hotch-pot of the Hindu undivided family of which he was the karta, with the intention of abandoning his rights in that property and then dividing it unequally between his wife and sons did not amount to gift within the meaning of the term " gift " as defined in the Gift-tax Act. The Gift-tax Act includes certain transfers with inadequate or pretended consideration within the definition of " gift", whereas under the general law, the existence of consideration, however inadequate, removes transfer from the category of gifts. The gift-tax creates this fiction and no more. The Mysore High Court has also not dealt with the last proposition of the Andhra Pradesh High Court in Krishna Rao's case [1968] 70 ITR 812. The Supreme Court in CGT v. N. S. Getti Chettiar [1971] 82 ITR 599 has also held t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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