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Issues involved: Determination of when a gift of immovable property becomes complete for the purpose of gift-tax liability under the G.T. Act, 1958.
Summary: The High Court of Gujarat addressed the issue of when a gift of immovable property becomes complete for the purpose of gift-tax liability under the G.T. Act, 1958. The question was whether the gift becomes complete upon execution of the gift deed or upon its registration. The GTO contended that the gift becomes complete upon registration, while the AAC held that the date of execution of the gift deed was relevant. The Tribunal sided with the GTO, leading to a reference to the High Court by the assessee. The court analyzed Section 122 of the Transfer of Property Act, 1882, which allows for a gift of immovable property through a registered instrument. It was noted that the transaction of gift would be complete only when a registered document is executed, as per Sections 122 and 123 of the Act. The court also considered Section 47 of the Registration Act, 1908, which allows a registered document to operate from a date earlier than its registration. Previous Supreme Court decisions were cited to explain the scope and impact of Section 47. Referring to Supreme Court judgments in similar cases, the High Court upheld the view taken by the Tribunal. It was concluded that the gift was completed only upon the registration of the deed, falling within the relevant previous year for assessment. The court answered the question in favor of the revenue and disposed of the reference without costs.
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