9911796707
TMI Blog2005 (1) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore there were no valid transfers and any valid gifts. The Assessing Officer rejected the contentions of the assessee and completed the gift-tax assessment holding that the first set of transactions amounted to gift of properties. In first appeal, the CGT (Appeals) held that the transfers made by the assessee at the first instance were not complete and the consequent gifts were not absolute and therefore, there cannot be a case of proper gift. The CGT (Appeals) held that, therefore, the gift-tax assessment was not valid. The assessment was accordingly cancelled. 3. The Revenue is aggrieved and therefore the appeal before us. The grounds raised by the Revenue in this appeal read as below: 1. The order of the CIT(A)-IV, Cochin canceling the gift-tax assessment order is against law, facts and circumstances of the case. The CIT (Appeals) should have held that there was a valid gift as there is a voluntary transfer effected by registered documents duly attested. The gift was accepted by the donee during the lifetime of the donor as is evidenced by mutation effected in the donee's favour in village office records. 2. There was no happening of a specified event agreed upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is still capable of giving. If the donee dies before acceptance, the gift is void.' Unless there is acceptance there can be no gift. In the judgment relied on by the learned counsel for the appellant in (1996) c2CTC 150 (cited supra), there is a reference to the decision reported in Venkatasubbamma v. Narayanaswami AIR 1954 Mad. 215. If there is acceptance of the gift after execution of the deed, even though the registration was postponed to a later date, the gift would become irrevocable. The fact that the deed was executed and registered would not make it irrevocable, if in fact there was no acceptance by the donee, either before registration but after execution or even after registration. What the law requires is acceptance of the gift after its execution though the deed may not be registered. Anterior negotiations or talks about the transfer of property by way of gift would not amount to acceptance of the transfer of the property by gift. Acceptance may be implied but the facts relied on to draw an inference of acceptance must be acts of positive conduct on the part of the donee or persons acting on his behalf and not merely passive acquiescence such as standing by when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the authorized representative of the assessee that the cancellation of the gifts made by deeds executed by the assessee was not an after thought to avoid tax liability because the cancellation deed in fact was anterior to the notice issued under section 16(1) and also on the basis of the submission that the Tribunal had not considered the facts brought on record by the learned first appellate authority vide para 2, page 8, which reads as under: 'In the deed of transfer she has not signed accepting the gift, the assessing officer states in page 5 of the assessing order that Miss Sunitha Kurian has made application for transfer of documents as reflected in the transfer deed in, village records also. On going through case records I do not find any basis for such an observation by the Assessing Officer. There is no document where Miss Sunitha Kurian has signed. The Assessing Officer has not collected any copy of application by Miss Sunitha Kurian to village officer to transfer of property in her name. As such the Assessing Officer's observation is only a matter of conjecture and not a finding based on concrete evidence. In the village officer's letter addressed to Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the assessee stated that those gifts were subsequently cancelled by him. 13. And now, what is a gift? A gift must be the unconditional transfer of an existing property in favour of another person and free of consideration. Acceptance of the gift also is a must. Nobody can thrust upon gifts on others. While the facts of a particular case are considered in the light of the above legal position, we should give more importance to the pith and substance of that transaction, rather than the ornamental format of that transaction. In the present case, who are the parties to the transaction? The assessee and his daughter. The assessee is the father and guardian. Daughter was unmarried at that time. She was a student. She was dependent on her father. In such circumstances, what is the reason to presume that the assessee's daughter had exercised her free will and had involved in the transaction in a conscious manner and had accepted the gifts from her father. So long as she is dependent on the assessee and as she was a student at that time, it is too exaggerated to believe that the assessee might have sought a formal consent from his daughter for all the above transactions and the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue is dismissed and the Cross-objection is allowed. Order accordingly. Per Mahavir Singh, Judicial Member. - I have the benefit of going through the proposed order of my learned brother Hon'ble Accountant Member in this case. Despite my best efforts and great persuasion to myself I have not been able to agree with the conclusion as arrived at by my learned brother. The reasons for the same are incorporated in the present order of mine which is as under. 2.1 The respondent-assessee executed seven gift deeds for conveyance of properties in favour of his daughter during the previous year 1993-94 relevant to the assessment year 1994-95. That the total value of the properties under consideration was Rs. 13,26,700 as per the value given in the gift deeds. The details of immovable properties transacted by gift deeds are available in the gift-tax assessment order as well as the order of the first appellate authority and the same is being reproduced as under: ------------------------------------------------------------------------- Date Document No. Amount Rs. Extent of land Re-Survey No. ------------------------------------------------------------------------- 4-2-1994 475 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. Aggrieved, the revenue preferred this second appeal before the Tribunal and raised three effective grounds of appeal. The grounds raised are already reproduced by my learned brother in his proposed order, so to avoid duplicity I am not reproducing the same again. The assessee has also come to the Tribunal by way of cross objection. 3. The appeal and cross objection were heard and disposed of by the Tribunal vide its order dated 30-10-2003. The Hon'ble Bench of the Tribunal reached at the conclusion that the transfer was complete and the gift was absolute, making the assessee's case falling under the purview of the Gift-tax Act and in view of this, the order of the Assessing Officer was restored. Aggrieved, the assessee filed a Misc. Petition on 14-2-2003. The Hon'ble Bench, considered the submissions of the assessee and re-called the order of the Tribunal dated 30-10-2003 for fresh adjudication by giving the reasoning, which are in the paragraph 4 of the recalled order dated 27-2-2004. This paragraph is already reproduced by my learned brother in his proposed order at page 6, so to avoid duplicity I am not reproducing the same again. 4.1 During the course of hearing, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elil Mariamma alias Maryamma vide document No. 3008 of 1978, Book Number 1, volume 327, pages 301 to 303, and is held by me directly by paying taxes and with all freedom and free from any encumbrances and the scheduled property is included in Thandaper Number 4666 Sunitha Kurian is my eldest daughter. On the basis of my affection towards you as daughter, and on account of your dependence on me and for your educational needs and as your share and for your daily needs the 25 cents mentioned below as Number 1 and Number 2 including all trees therein, I hereby transfer all my rights and ownership. -Page - 15 - And give the same to you as gift vide document executed. I hereby fully agree that from today onwards Sunitha Kurian will have and hold the scheduled properties and pay the Government taxes in your name and take pattayam and have rights of transaction and enjoyments forever. The schedules property has no loans or encumbrances and the schedule property is valued at Rs. 1,99,000 (Rupees One lakh Ninety Nine Thousand) only." 4.3 Again, a letter written by the Village Officer, Athirampuzha to the ITO, Ward-II, Kottayam, dated 12-8-2003 is further being reproduced along with the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and entirely handed over to the donee. In this way, the donor transferred all the rights and ownership to the donee as gift vide gift deed. The words of the gift deed are very crucial which read as under: "I hereby transfer all my rights & ownership and give the same to you as gift vide document executed. I hereby fully agree that from today onwards Sunitha Kurian will have and hold the scheduled properties and pay the government taxes in your name and take pattayam and have rights of transaction an enjoyments forever." 52. From the revenue records of the Village Officer, it is seen that document No. 3531 which is a registered gift deed dated 8-10-1993 and on the basis of this gift deed the donee applied for mutation of this property in her favour in the revenue records and the revenue department transferred this property in her name as is clearly indicated from the revenue records, the copy of which is reproduced above. This finding has also been given by the Assessing Officer in his assessment order which reads as under: "I have made verification with the concerned Village Office and it is informed by the Village Officer, Athirampuzha in his letter No. 18/2001 that transfer ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the submissions in the affidavit deserve acceptance in conjunction with the other facts of the case." Finally, the CGT (Appeals) held as under: "5. Apart from my above observations, one pertinent issue will be as to whether Gift Tax Act can have a concept of 'transfer' that is independent of Transfer of Property Act. In other words, can the definition of the word 'gift' in the Gift Tax Act be wider than the definition of 'gift' in the Transfer of Property Act? This interesting question arose in the case of Sirehmal Nawalakha decided by the Supreme Court reported in 251 ITR 108. In this case, the Supreme Court has clearly held that in Gift Tax matters, the general law did not stand abrogated and the requirement of applying the provisions of the Transfer of Property Act and the Registration Act had to be fulfilled. In the instant case, as discussed by me in the foregoing paras, all the requirements of the Transfer of Property Act cannot be held to have been met by virtue of the fact that the acceptance by the donee of the gift has not been established beyond doubt by the Assessing Officer." 6. From the above facts the two issues emerge for deciding this case and those are as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section]; Section 2(xxiv): 'transfer of property' means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and without limiting the generality of the foregoing, includes-" 6.2 The definition of gift as provided in sections 122 and 123 of the T.P. Act, reads as under: "122. 'Gift defined'--'Gift' is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Acceptance when to be made. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void. 123. Transfer how effected-For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of movable property, the transfer may be effected either by a registered instrument si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered from the donor. It does not seem to be that the intention of the Legislature was to make a person liable for tax in respect of a transaction which he does not agree to or even repudiates. If such an argument is accepted, the result will be that the donee can be made liable for tax even in cases where he repudiates the gift, for the taxable event arises on the donor executing the gift deed. The question of acceptance of the gift by the donee is closely related to the question whether the donor has perfected the gift on his part. It is a well-accepted principle of law that a conveyance takes effect only if the interest created thereby vests in the transferee, and such vesting can never take place without the transferee's consent and concurrence. In that view of the matter, the acceptance of the donee is also essential under the Gift-tax Act [CGT v. R. Kesavan Nair [1974] 96 ITR 365, 369-70 (Ker.)].However, according to the Andhra Pradesh High Court, in Vadulla Venkata Rao v. CGT [1972] 85 ITR 249, 259 (AP), the acceptance of gift by a donee or some one on his behalf does not appear to be a specific requisite condition for a gift under the Gift-tax Act." 6.4 The Hon'ble Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. Here, I do not agree with the finding of the C.G.T. (Appeals) that, all the requirements of the T.P. Act cannot be held to be met by virtue of the fact that the acceptance of the gift by the donee has not been established beyond doubt by the Assessing Officer. After effecting the transfer on the basis of gift deeds, the donee has also paid land revenue tax in respect of the properties under reference which is very clearly evident from the revenue records. In view of this, I have no hesitation in holding that the donee has accepted the gift. There is no other requirement under the T.P. Act and no other legal formalities to be left to execute the mutation effecting in favour of the donee. In the revenue register, it is a clear cut fact and that also on the basis of application submitted by the donee as is evident from the revenue records, the donee has accepted the gift. In my view, where the deed of gift was delivered by the donor to the donee and delivery of the deed and on the basis of the deed mutation effecting in revenue records, this is sufficient for acceptance of transfer within the meaning of the sections 122 and 123 of the T.P. Act. Further, the plea of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of gift deed has been done in the revenue records and that also on the basis of application from the donee as it is evident from the letter of the Village Officer which has already been reproduced in earlier paragraphs. 6.7 In view of these facts and legal aspects, I am of the view, as regard to the first issue, that the gift is complete and accepted by the donee and acceptance and transfer is complete. 7. Now coming to the second issue, in respect of cancellation of gift deed, in the G.T. Act, there is no provision as regards to the cancellation or revocation of gift. The G.T. Act is silent on the revocation of gift and if, gift is made, whether it can be cancelled, there is no specific requirement or condition in the G.T. Act. But the T.P. Act is very clear in this respect and the provisions of section 126 of the T.P. Act, applies to revocation or cancellation of gifts, which reads as under: "126. When gift may be suspended or revoked.- The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end to the gift. The condition must be made at the time of gift and the donor cannot impose such condition after the gift is absolute. In the absence of such condition, the donor has no power for revocation of the gift. 7.2 Now I have drawn my strength on conditional gift from Halsbury's Laws of England, Third Edition, Volume 18, page 389 which is as follows: "Gifts may be made subject to conditions either precedent or subsequent. A condition precedent is one to be performed before the gift takes effect. A condition subsequent is one to be performed after the gift had taken effect, and, if the condition is unfulfilled, will put an end to the gift; but, if a condition subsequent is void, the gift remains good. If the words of the condition are capable of being construed either as a condition precedent or as a condition subsequent but the words of the written instrument point to the inference that the donors intended the condition to be subsequent rather than precedent, the court will hold the condition to be subsequent." 8. In view of the above, I am of the view that when the gift is complete and which is not a conditional one as envisaged in section 126 of the T.P. Act, the don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order passed by the assessing authority. The appeal filed by the Revenue was allowed and the cross objection filed by the assessee was dismissed. 5. Thereafter the assessee filed a rectification petition in M.P. No. 46 (Coch.)/2003 on 14-11-2003. The Tribunal found that it has not considered the decision of the Hon'ble Madras High Court in R. Jamuna Bhai v. M.A. Anusuya AIR 2001 Mad. 392. The Tribunal also found that in the Village Officer's letter addressed to the Assessing Officer, there was no mention regarding any application put in by Miss Sunitha Kurian for transfer of properties in her name. The Tribunal felt that the matter required reconsideration on the basis of the facts brought in the miscellaneous petition. Therefore the earlier order of the Tribunal dated 30-10-2003 was recalled for fresh adjudication. 6. The matter again came up before the Bench consisting of the present Members for hearing and disposal. The Accountant Member who authored the order, held that there was no evidence to show that the assessee's daughter had accepted the gifts made by her father on the first instance. He held that a gift for the purpose of levy of gift-tax must be a real gift. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... daughter during the period from 8-10-1993 to 17-2-1994, relevant to the assessment year 1994-95, and whereas, later on, the assessee has cancelled those conveyances by registering Cancellation Deeds in 1997, the Assessing Officer is justified in law in framing an assessment under the Gift-tax Act, 1958, for the assessment year 1994-95?" ORDER UNDER SECTION 23(II) OF THE GIFT-TAX ACT, 1958 READ WITH SECTION 255(4) OF THE INCOME-TAX ACT, 1961 Per Shri Mahavir Singh, J.M. - On a difference of opinion between the Members of the Bench in the above-mentioned case, following two questions are being referred to the Hon'ble President of the Income Tax Appellate Tribunal with a request that the same may be referred to a Third Member: "1. Whether, on the facts and in the circumstances of the case, the gift is complete, as the property stands transferred in revenue records on the basis of registered gift deeds on an application submitted by the donee? 2. Whether, on the facts and in the circumstances of the case, the subsequent cancellation of the gift deeds are valid in view of provisions of the Gift-tax Act, 1958 and the provisions of section 126 of the Transfer of Property Act, 1882, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the prescribed mutation fee. The Donor however, thought that gifts made through the Gift Deeds were incomplete and he was entitled to revoke the gifts. With above purpose in view the assessee donor executed Revocation Deeds and registered the same with Sub-Registrar on 8-5-1997; 29-7-1997; 8-7-1997; 8-7-1997; 8-7-1997; 8-5-1997 & 8-5-1997 respectively. The assessee also claimed that he all along continued to be in possession and control of the property gifted and exercised all rights of ownership. 5. The Assessing Officer after coming to know of above Gift Deeds initiated proceedings under Gift-tax Act to bring to charge the value of properties gifted under the Gift-tax Act by issuing notice to the assessee on 27-4-1998. The assessee in response to above notice submitted a return declaring gift at Nil The assessee during the course of gift-tax proceedings, relied upon the fact that gifts purported to be made by him were never accepted by the Donee. The assessee also relied upon the Revocation Deeds executed by him and thus claimed that no gift chargeable to tax was made by the assessee. In response to further queries the assessee elaborated his case in letter dated 28-10-1999 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gift by her action in filing an application in village office for effecting transfer. Hence, any argument that the donee has not accepted the gift is of no avail Therefore, the argument that 'the donee has not accepted the gift and so the gift has not become complete' is not at all correct and hence it is rejected. A copy of the letter of the village officer is annexed to this assessment order." Thereafter the Assessing Officer concluded as under: "I have gone through the deeds of transfer effecting the gift by the assessee I have also verified the location of the property, its importance, the market value of properties with a view to see whether the market value of the property shown in the document of transfer is reasonable with regard to the market conditions and importance of the properties transferred. On a verification of the above aspect, I am of the view that the market value of the properties as declared in the documents of transfer are reasonable in all respects and needs no variation. Hence, the value of the property shown in the document of transfer will be adopted straightaway or completing the gift-tax assessments. The assessment is accordingly completed as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Instead, he has chosen to ignore the fact of existence of cancellation deeds by raising technical issues such as low stamp duty paid, etc. The Assessing Officer attaching all the importance to the gift deeds and practically ignoring the cancellation deeds cannot be taken as a fair approach for deciding the issue. (2) In the case of Pankajakshiamma v. Chandramathiamma reported in [2001] 1 Ker. Law Journal 438, the Kerala High Court has dealt with the issue as to what constitute a valid transfer as gift. The Court has observed that 'section 123 of the Transfer of Property Act deals with the manner of execution of gift deed. If the purpose is or making a gift of immovable property, the transfer must be effected by a registered instrument signed by on or behalf of the donor and attested by atleast two witnesses. By a reading of sections 122 and 123, it can be seen that in order to execute a valid gift, the following elements are to be proved:- (i) It must be a voluntary transfer. (ii) The gift must be accepted by the donee during the lifetime of donor. (iii) The gift must be effected by a registered document. It must be attested by two attestors. If all the elements are fulfille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive mental attitude to receive or come into possession of the property. Moreover, under section 29 of the Gift-tax Act, the donee can be called upon to pay the tax if the Gift-tax Officer is of the opinion that the same cannot be recovered from the donor. It could not have been the intention of the Legislature to make a person liable to tax in respect of a transaction which he does not agree to or even repudiates. It is a well-accepted principle of law that a conveyance including a gift takes effect only if the interest created thereby vests in the transferee and such vesting can never take place without the transferee's consent and concurrence.' Thus, the above decision prescribes that the provisions of the Gift-tax Act can be invoked only if the Assessing Authority proves that there was consent by the "donee" towards the gift being made. This onus cast on the Assessing Officer has not been properly discharged in this case. (4) No doubt, the property has been transferred in the name of the appellant's daughter in the village office records. The mutation in her favour also finds a mention in the letter written by the Village Officer to the Assessing Officer. However, this alone d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been accepted for registration by the Sub-Registrar goes to show that the cancellation deeds were proper. Even presuming that the stamp duty paid was less, it is for the Sub-Registrar to initiate proceedings against the appellant and it is not incumbent on the Assessing Officer to give any weightage for the same. 5. Apart from my above observations, one pertinent issue will be as to whether Gift-tax Act can have a concept of 'transfer' that is independent of Transfer of Property Act. In other words, can the definition of word "gift" in the Gift-tax Act be wider than the definition of "gift" in the Transfer of Property Act? This interesting question arose in the case of Sirehmal Nawalakha decided by the Supreme Court reported in 251 ITR 108. In this case, the Supreme Court has clearly held that in Gift Tax matters, the general law did not stand abrogated and the requirement of applying the provisions of the Transfer of Property Act and the Registration Act had to be fulfilled. In the instant case, as discussed by me in the foregoing paras, all the requirements of the Transfer of Property Act cannot be held to have been met by virtue of the fact that the acceptance by the donee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) The assessee was very much in possession and enjoyment of properties during the relevant period. There was no de facto gift at all. (6) Gift for purposes of levy of Gift-tax must be a real gift. Possession and enjoyment of the gifted property must invariably be transferred from the donor to the donee. In the present case except for format of documents relating to gifts, there was no actual transfer of possession or enjoyment of the properties. There was no existence of the gift. The learned AM accordingly held that the impugned order of the CIT(A) was just and fair and in accordance with law and was required to be upheld. 10. The learned Judicial Member (JM) in the proposed order did not agree with the view taken by the learned AM. After taking note of dates of gift deeds and dates of cancellation of deeds as also the submissions of the assessee, the learned JM held that valid gifts were made and completed by the assessee. Gifts made were not conditional as envisaged under section 126 of the Transfer of Property Act. The donor therefore, had no power of revocation. In the above circumstances, Gift-tax levied by the AO on the basis of gift deeds executed by donors in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act were satisfied in this case. Learned JM had some reservations on the question whether acceptance was essential under the Gift-tax Act. However after considering decision of the Hon'ble Supreme Court in the case of CIT v. Sirehmal Nawalakha [2001] 251 ITR 108, learned JM also accepted that acceptance of gift by the donee was essential and that in this case the donee did accept the gifts. The learned JM in the proposed order did not agree with the learned CGT(A) that acceptance of gift by the donee was not established beyond doubt. 11. As regards second question relating to cancellation of gift deeds, learned JM has held that there was no provision relating to cancellation or revocation of gift. Gift-tax Act is silent on this. Judicial Member also analyzed provisions of section 126 of T.P. Act. He held that in the original gift deeds, the donor did not lay any condition and gifts were unconditional, therefore, the provision of section 126 did not apply. The donor reserved no power of revocation and therefore, cancellation deeds were invalid. On account of above, the learned JM set aside the order of the CGT(A) and restored the order of the AO in his proposed order. 12. On acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt Mulla Zawar Hussain v. Smt. Mono Bai AIR 1956 Bhopal 66. In fact these two decisions were relied upon and placed by the assessee's representative in his Paper Book. The learned DR read certain observations out of above decisions, which supported the case of the revenue as accepted by the learned JM in his proposed order. The learned DR accordingly supported the proposed order of the learned JM as also of the AO. 13. The learned counsel for the assessee on the other hand, supported the proposed order of the learned AM as also of the CGT(A). He referred to detailed submissions made by the assessee before the AO particularly to pages 15 and 16 of the Paper Book filed by him. He argued that alleged gift was never accepted by the donee nor the possession was ever delivered to her. Even original gift deeds remained in possession of the donor and were still available with him. The donee never made any application for mutation in the revenue record as alleged by the AO and the learned JM in the proposed order. He accordingly submitted that observations made by the learned JM in the proposed order were factually incorrect. The learned counsel for the assessee also relied upon observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the gifted property and hence the gift has not become complete. This argument of the assessee is without any merit. The village documents are the fundamental documents with regard to immovable properties and their ownership. Whenever a transfer is effected in respect of an immovable property by way of document registered in the office of the Sub-Registrar, a corresponding transfer should be effected in the village records also to make the transfer complete. Then only, the transferee can effect payment of land tax in her favour in respect of the property so transferred. In this case, I have made verification with the concerned Village Office and it is informed by the Village Officer, Athirampuzha in his letter No. 18/2001 that transfer has been effected in respect of properties comprised in his territorial area which are under consideration in this assessment order. After effecting the transfer in the village documents in favour of the donee in this case, land tax has also been paid by the donee, Smt. Sunitha Kurian in respect of the properties under reference. In respect of certain properties lying in the territorial area of Village Officer, Ettumanoor also, transfer has been ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) should have held that there was a valid gift as there is a voluntary transfer effected by registered documents duly attested. The gift was accepted by the donee during the lifetime of the donor as is evidenced by mutation effected in the donee's favour in village office records. 2. There was no happening of a specified event agreed upon by the donor and donee that the gifts can be revoked. 3. The affidavit filed by the donee before the appellate authority that she has not accepted the gift should not have been relied upon." 17. The assessee has come up in cross objection which is merely in support of order of learned CGT(A). It is in my view not maintainable. 18. The real controversy between the parties is whether alleged gifts in question were accepted by the donnee in accordance with statutory provisions. Both the learned Members as also the learned representatives of parties who appeared before me accepted the proposition that gift to be valid is required to be accepted by the donee and that donee's concurrence in the gift is essential in the light of decision of the Hon'ble Supreme Court in the case of Sirehmal Nawalakha. Apart from the decision of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o effect mutation and to pay tax. Even though DW2 has stated that she has paid tax, no tax receipt is forthcoming. These are all circumstances that goes against the first defendant." In the case of R. Jamuna Bhai v. M.A. Anusuya AIR 2001 Mad. 392, their Lordships after reviewing the relevant case laws and relevant provisions of Transfer of Property Act, observed as under:- "Unless there is acceptance there can be no gift. In the judgment relied on by the learned counsel for the appellant in (1996) 2 CTC 150, there is a reference to the decision reported in Venkatasubbamma v. Narayanaswami AIR 1954 Mad. 215. If there is acceptance of the gift after execution of the deed, even though the registration was postponed to a later date, the gift would become irrevocable. The fact that the deed was executed and registered would not make it irrevocable, if in fact there was no acceptance by the donee, either before registration but after execution or even after registration. What the law requires is acceptance of the gift after its execution though the deed may not be registered. Anterior negotiations or talks about the transfer of property by way of gift would not amount to acceptance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited decisions that acceptance of gift and concurrence of the donee is essential to treat the gift as complete and liable to charge under the Gift-tax Act. The position to prove validity and completeness of gift under the Gift-tax Act is same as under general law. The acceptance and concurrence on the part of the donee has to be established by the person who is asserting that a valid and chargeable gift was made. In the present case revenue is rejecting the case of the assessee that he was not chargeable to gift-tax and therefore, burden of proof that Gift-tax is leviable is on the revenue. The acceptance and concurrence cannot be assumed. It has to be established through clear and cogent evidence. Here I must hasten to add that above onus can be established through circumstantial evidence, if direct evidence is not available. Although I disagree with the Assessing Officer that record maintained by the Village Officer are the fundamental documents with regard to immovable properties and their ownerships, I accept that, Production of gift deed by the donee before the revenue authorities for getting mutation effected in donee's name in the revenue record would be an important facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before me as also before the lower authorities to support a legal proposition that a person cannot give a better title than he himself possesses. There can be no quarrel with this legal proposition. But this proposition has no application in this case. The legal question that could be examined was whether gift deeds were conditional and could be revoked as provided under section 126 of the Transfer of Property Act. This question is different from the question whether gifts were accepted by the donee or not. I do not see any material to hold that gift deeds were conditional in this case and could be revoked under section 126 of the TP Act. Nothing further need be stated on this proposition. 19. Now the question whether gifts were accepted in this case? The assessee in his letter, dated 28-10-1999 before the Assessing Officer stated that though documents (gifts) were executed, these were never completed. The property never vested in the donee i.e., Sunitha Kurian. The donee never took possession of the properties nor dealt with the same in any manner and that property continued to be in his possession. He further asserted that original documents did not come into force and properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to prove that the appellant's daughter had accepted the gifts. In the deed of transfer, she has not signed accepting the gift. The Assessing Officer states in page 5 of the assessment order that 'Miss Sunitha Kurian has made application for transfer of documents as reflected in the transfer deed in the village records also'. On going through the case record, I do not find any basis for such an observation by the Assessing Officer. There is no document where Miss Sunitha Kurian had signed. The Assessing Officer also has not collected any copy of application by Miss Sunitha Kurian to the Village Officer for transfer of property in her name. As such, the Assessing Officer's observation is only a matter of conjecture and not a finding based on concrete evidence. In the Village Officer's letter addressed to the Assessing Officer also, there is no mention regarding any application made by Miss Sunitha Kurian for transfer of the property in her name. The certificate only mentions about the transfer and not as to who made the application for the transfer. All these make the Assessing Officer's observation that Miss Sunitha Kurian had accepted the gift as hollow and unsubstantiated." T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to letter, but the Village Officer sent him copy of some registers relating to applications filed before the Village Officer as also copy of register relating to payment of charges. In the said register as per pages 18 and 19 of the Paper Book of the revenue in the column 'name of the Applicant', Sunitha Kurian is shown as applicant. It is further shown that she had paid SD charges of Rs. 9. The aforesaid additional evidence has been relied upon by the learned JM to decide against the assessee and to hold that the CGT(A) in his order recorded an erroneous finding without considering that the documents relied upon was additional evidence and was not available on record when the matter was considered and decided by the CGT(A). Having regard to the manner in which the Assessing Officer proceeded and recorded findings on filing of the application, the learned CGT(A) was right in taking affidavit of the donee on record. Ground No. 3 of appeal therefore, is decided against the revenue. 24. The further question required to be considered is whether on the facts and in the circumstances of the case there is justification to interfere with finding of the CGT(A) that Ms. Sunitha Kurian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Above finding was found to be not based on any material and conjectural. Now in the second appeal, the Assessing Officer wants to take a different stand contradicting his finding in the assessment order. I have already narrated circumstances to show that all relevant information was sought by the Assessing Officer in assessment proceedings. What prevented the Assessing Officer from sending his Inspector then to the Village Officer to collect the application allegedly filed by the Miss Sunitha Kurian; when the Assessing Officer knew the importance of such an application to prove the case of Revenue? He had also written to the Village Officer to inform the change of possession on the basis of gift. Facts about the information sought were withheld in the original assessment order yet findings as noted above were record. The assessee had to rebut a totally imaginary finding relating to application filed, by filing an affidavit before the CGT(A). In the light of the above circumstances particularly the manners in which the findings were recorded by the Assessing Officer in the assessment order, it is not fair on the part of the Assessing Officer to contend that the original application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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