TMI Blog1979 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was justified in its conclusion that the memo of compromise itself constituted the gift in the case? 3. Whether the Appellate Tribunal was justified in holding that even if the memo of compromise is not registered, it will still constitute a gift in the circumstances stated by the Appellate Tribunal ? " The GTO started proceedings under s. 16(1) of the G.T. Act, on the basis that by reason of the omission or failure on the part of the assessee to make a return under s. 13 in respect of the taxable gift made by him the taxable gift has escaped assessment. In response to the notice, Paramayee Ammal, the donor, filed a return on January 29, 1971. She stated: " I have given agricultural lands to my daughter, Srimathi Lakshmi Amm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the G.T. Act had not been enacted. The AAC rejected these contentions. He pointed out that the patta had not been transferred in the donee's favour and that she had been recognized by the Agrl. ITO only after the decree was passed in the suit mentioned above and that, therefore, the title to the property was obtained by the donee only in the year 1966. He, therefore, confirmed the assessment to gift-tax. The matter was taken on appeal to the Appellate Tribunal and the same contentions which were unsuccessfully urged before the gift-tax authorities were also urged before the Tribunal. The Tribunal held that there was a valid gift by the memo of compromise made on 18th April, 1966, and there was no gift prior to the compromise. It, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty and to increase the value of the property of any other person." The short point for our consideration is whether there was any creation of interest in the property in the present case during the relevant previous year? Learned counsel for the assessee contended that there was a gift in the year 1956. According to him, the donee's father was a very wealthy individual, that the donee herself was married in the year 1933 or so and that at the time of the marriage he had promised to give her substantial properties. He had not effected any such gift during his lifetime and he died in the year 1953 in April. It was further stated that at the time of his death, he had instructed his wife to transfer the property in favour of the donee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he defendant and her men from interfering with her (plaintiff 's) peaceful possession and enjoyment of the suit property; (c) and (d) and for other appropriate directions. The suit was filed on March 9, 1966. The compromise was entered into on April 18, 1966. As recorded in the preliminary portion of the decree, it appears that there was a joint endorsement made by the parties on the back of the plaint and in terms thereof the court passed the compromise decree. The Tribunal is wrong in looking for a compromise deed as no such deed was ever entered into. Under the compromise decree, it was declared that the plaintiff would be entitled to the suit property absolutely and the defendant and her men would be restrained by an injunction from int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no gift in the year 1966 because there was no registered instrument effecting transfer of the property. In fact, the learned counsel for the Commissioner was in the horns of a dilemma. If he accepted the position that the decree merely declared some pre-existing rights of the parties, then the gift would have been effected in 1955 or 1956 when delivery of possession was given. If the compromise memo itself created an interest in the property, then it fails for want of registration. The result is that there is absolutely nothing to show that there was a gift of property as required by law in the year under consideration. The Tribunal has also referred, in the course of its order, to two decisions of the Privy Council. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he donee, the donor cannot revoke the gift even before its registration on the ground that the gift is not completed until the deed is registered. This decision also is of no relevance to the point in issue because we are concerned here with a case where there is no registered instrument of gift as required under s. 123 of the Transfer of Property Act. In both cases, a deed had been executed and the only question was whether the deed became invalid or useless because of adoption in one case, and attempted revocation in another. There is no such deed here. The instrument in writing is only the compromise memo or decree. As they are not registered, there is no gift in this year. There is no liability to gift-tax in the previous year under con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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