TMI Blog1983 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... on that may be given by them or any one of them for the purposes and objects of the said trust on such terms and conditions as may be imposed by the donors. On February 9, 1969, the assessee executed a deed styled as "agreement of gift" in favour of the said trust on a stamp paper of the value of Rs. 250. It was mentioned therein that the assessee was desirous of transferring further assets described in the schedule to the agreement, hereinafter called the " Chettinad Colony properties" to the trust as provided in cl. IO of the trust deed, dated March 14, 1957. Clause 5 of the agreement of gift stated that the donor had put the trustees of the trust in possession of the said properties from that date and that he had also undertaken to execute document of gift and register the same as soon as exemption was obtained from the Government of TamilNadu for the stamp duty payable therefor. The assessee thereafter applied to the Government of TamilNadu on April 24, 1969, for exemption from payment of stamp duty for the gift deed, which he proposed to execute in favour of the trust conveying the " Chettinad Colony properties " to the trust. The Government of TamilNadu by G.O. Ms. No. 557, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material for the purpose of assessment under the head " Income from property " as the assessee continued to be the owner of these properties and it is only in the owner's hands the income from these properties has to be assessed, notwithstanding the fact that the trust was in receipt of the income from the said properties. The further contention of the assessee was that no document is necessary for making a valid gift, if the intention of the donor to dedicate properties for a charitable object is clear and that since in the present case the agreement of gift, dated February 9, 1969, clearly sets out the intention of the donor, there is a valid dedication of the properties to the trust even on February 9, l969. In support of the said contention the assessee relied on the decisions of this court in Jai Narayan Jai Govind v. CED [1963] 49 ITR (ED) 105 and S. Devaraj v. CWT [1973] 90 ITR 400. The Tribunal rejected the said contention, holding that the said decisions did not apply to the facts of this case, that here, there has been a transfer of immovable properties from a donor to the trustees of an existing trust and that in such a case unless the transfer is by a registered docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis that the agreement of gift, dated February 9, 1969, did not amount to a gift deed as such, and that the gift deed was to be executed on future date after complying with certain formalities. It is, therefore, clear that the parties themselves did not treat the agreement of gift as completed gift. Clause 5 of the agreement of gift specifically provides: "The donor undertakes to execute a document of gift and register the same as soon as exemption is obtained from the Government of TamilNadu for the stamp duty payable for the deed." It is clear from the above extract that the parties did not contemplate the agreement of gift as document of gift, as the said agreement specifically provides for execution and registration of a document of gift at a future point of time. Notwithstanding this fact, the learned counsel for the assessee raised the plea that no document of gift is necessary, if the intention of the donor to dedicate the properties is clear and that in this case such an intention is clear from the agreement of gift, dated February 9, 1969. In support of this plea, the learned counsel relied on the decisions of this court in Jai Narayan Jai Govind v. CED [1963] 49 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by giving it to the trustees in which case the provisions of the Transfer of Property Act must be complied with and another is by dedication to the idol itself. The court was also of the view that though there can be an oral valid dedication to the idol, if the dedication is in writing, it is open to argument that by virtue of the Registration Act, no title would pass unless the document is registered. The court has also observed that the third mode, which is a dedication, offering, or obligation as it is called, is generally made on occasions of death or marriage in a Hindu family, that the usual form is to take a leaf of the tulasi plant in hand and with water offer the property in the presence of the persons assembled and that it is not usually done before the temple or in the presence of the trustees. According to this decision, this third mode, in the nature of things, does not require any writing or no writing could be thought of and if a writing is insisted upon, that will be regarded as detracting from the sanctity of the proceeding. This decision is authority for the proposition that even though a dedication may be made orally without any document in writing, if the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of section 5 of that Act. See Gangi Reddi v. Tammi Reddy [1927] ILR 50 Mad 421 (PC), Sooniram Ramniranjandass v. Alagu Nachiyar Koil [1939] Rangoon LR 59; AIR 1938 PC 259 and Narasimhaswami v. Venkatalingam [1927] ILR 50 Mad 687 [FB]. The subject-matter of a dedication must, however, be some specific property or asset and a mere credit entry in a book of account cannot be the subject of dedication. Secondly, property may be transferred by way of a gift to the trustee or trustees of a temple. Such a transfer, being one made to living person, must comply with the requirements of s. 123 of the Transfer of Property Act. " Paragraph 790 of Mayne's Treatise on Hindu law and Usage, 11th Edn. (pp. 920-921), explains as to how a dedication can be effected and the relevant portion which deals with various principles as culled out from the decisions referred to above and others is this: "A dedication of property, whether movable or immovable, for a religious or charitable purpose, may, according to Hindu law, be validly made verbally. No writing is necessary to create an endowment except where the endowment is created by will, in which case the will must be in writing and attested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lect and appropriate the income from the properties for charitable purposes. But it is well established that Indian law does not recognise the theory of beneficial ownership and it recognises only legal ownership. In Hall and Anderson (P.) Ltd. v. CIT [1963] 47 ITR 790 (Cal), the Calcutta High Court has expressed the view that under s. 9 of the Indian I.T. Act, 1922, an assessee has to pay tax under the head " Income from property " in respect of the bona fide annual value of the property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such portions of such property as he may occupy for the purposes of any business, profession or vocation carried on by him the profits of which are assessable to tax subject to allowances mentioned. The principle laid down in that case was whether the assessee was in receipt of rents or not from the property, he has to pay tax under the head " Income from property " based on the annual valuation of his property. In CIT v. Ganga Properties Ltd. [1970] 77 ITR 637 (Cal), there was sale agreement in respect of a house property followed by delivery of possession in 1956. However, the sale deed was executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Court of Chancery in England, and the Transfer of Property Act gives a statutory charge upon the estate to an unpaid vendor unless it be excluded by contract. Such charge, therefore, stands in quite a different position from a vendor's lien. You have to find something, either express contract, or at least something from which it is a necessary implication that such a contract exists, in order to exclude the charge given by the statute. ' " Another passage from a decision in Chhatra Kumari Devi v. Mohan Bikram Shah, AIR 1931 PC 196, has also been quoted and it is as follows (p. 646 of 77 ITR): " ' The Indian law does not recognise legal and equitable estates ...... By that law, therefore, there can be but one " owner ", and where the property is vested in a trustee, the " owner " must, their Lordships think, be the trustee.' " The learned judges of the Calcutta High Court in the decision mentioned above ultimately summarised their conclusions as follows (p. 650 of 77 ITR): "In Indian law, beneficial ownership is unknown and there is but one owner, namely, the legal owner both in respect of vendor and purchaser and trustee and cestui qui trust. And the expression ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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