1991 (1) TMI 213 - AT - Income Tax

Summary

Issues:
1. Assessment of gift for the relevant assessment year.
2. Validity of the assessment order by the GTO and Dy. CGT(A).
3. Completion of gift and relevance of registration of gift deed.
4. Jurisdiction of the GTO for assessment without a valid return.

Analysis:
1. The appellant filed a gift return for the assessment year 1986-87, declaring the value of the gifted property. However, the GTO found the gift incomplete on the specified date and assessed it for the following year. The Dy. CGT(A) upheld this decision, leading to the appeal before the ITAT.

2. The appellant argued that the gift was completed on the execution date of the gift deed, despite delayed registration due to external factors. Citing legal precedents, the appellant contended that the gift should be taxable for the initial assessment year, not the subsequent one as determined by the GTO and Dy. CGT(A).

3. The appellant emphasized that under the GT Act, the completion of a gift is based on the execution of the gift deed, not its registration date. Legal references were made to support this argument, highlighting that the gift takes effect from the date of execution, not registration. The appellant urged the ITAT to direct the Revenue authorities to assess the gift for the correct assessment year.

4. The ITAT considered the arguments and legal precedents presented by both parties. It noted that the GTO had assessed the gift for the following year without a valid return or statutory notices issued to the assessee. The ITAT concluded that the assessment for the subsequent year was irregular and directed that the gift should be assessed for the initial assessment year, thereby allowing the appellant's appeal.

In conclusion, the ITAT ruled in favor of the appellant, determining that the gift should have been assessed for the initial assessment year based on the completion date of the gift deed. The decision highlighted the importance of the execution date of the gift deed in determining the taxability of the gift, as per legal precedents and provisions of the GT Act.