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Issues Involved:
1. Determination of the effective date of a gift for gift-tax purposes: date of execution vs. date of registration. 2. Applicability and interpretation of Section 47 of the Registration Act in the context of gift registration. 3. Impact of registration on the effectiveness of a gift against third parties, including the Revenue. Detailed Analysis: 1. Determination of the Effective Date of a Gift for Gift-Tax Purposes: Date of Execution vs. Date of Registration The primary issue is whether the gift becomes effective from the date of registration of the document or from the date of execution of such deed. The Tribunal had held that the date of execution (April 13, 1973) should be considered the effective date, thus excluding the gift from the assessment year 1974-75. However, the High Court examined the provisions under the Transfer of Property Act and the Registration Act to determine the correct effective date. 2. Applicability and Interpretation of Section 47 of the Registration Act Section 47 of the Registration Act states that a registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. The High Court noted that while Section 47 allows a registered document to operate retrospectively from the date of execution, this principle primarily applies to determine priority between conflicting registered documents. The Supreme Court's interpretation in Ram Saran Lall v. Mst. Domini Kuer was cited, clarifying that Section 47 does not determine when a sale or gift is completed but merely allows a registered document to operate from an earlier date. The High Court emphasized that the transfer of property is not complete until the registration of the instrument, thus making the date of registration the effective date for the purposes of gift-tax assessment. 3. Impact of Registration on the Effectiveness of a Gift Against Third Parties, Including the Revenue The High Court also considered the implications for third parties, including the Revenue. It was held that while a registered document may take effect from the date of execution between the donor and donee, it is only effective against third parties, including the Revenue, from the date of registration. This ensures that the Revenue, which is not a party to the deed, is not unduly prejudiced by being unaware of the date of execution. The High Court concluded that the effective date for the purposes of gift-tax assessment should be the date of registration (July 13, 1973), not the date of execution. Therefore, the gift was rightly included in the assessment year 1974-75. Conclusion The High Court answered the question in the negative, holding that the Tribunal was not justified in excluding the value of the immovable properties gifted by the assessee from the total taxable gift for the assessment year 1974-75. The date of registration, not the date of execution, is the relevant date for determining the effectiveness of a gift for tax purposes. The judgment was in favor of the Revenue and against the assessee, with no order as to costs.
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