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TMI Blog1999 (9) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial year 1969-70, the relevant assessment for levy of tax would be 1970-71 and there was no obligation on her part to file the return of gift for the assessment year 1971-72. The Gift Tax Officer has not accepted the submission of the petitioner and held that the registration of the dead of settlement settling the immovable property took place on 8-6-1970, and the gift was properly chargeable under the Gift Tax Act for the assessment year 1971-72. In this view, he determined the value of the property gifted at ₹ 1,30,000 and made an assessment of the gift made for the assessment year 1971-72. 3. The petitioner preferred a revision petition before the Commissioner challenging the order of assessment. The Commissioner was of the opinion that the ownership of the immovable property would pass after the deed of settlement is registered by the appropriate authority and the fact that the donee was put in possession on 12-2-1970 is not material and the ownership over the gifted property would pass only on 8-6-1970, when the settlement deed was registered, which fell during the financial year 1970-71 relating to the assessment year 1971-72. He, therefore, held that the Gift Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made to the definition "gift" under section 2(xii) of the Gift Tax Act and submitted that though the Explanation was introduced by the Finance (No. 2) Act, 1987, with effect from 1-4-1988, it gives a clue that under the Gift Tax Act, the word, "gift" is widely defined and it is not open to the respondents to look into other Acts to find out when the gift becomes complete. Learned counsel for the petitioner relied upon the decision of Rajasthan High Court in the case of Sirehmal Nawalkha v. CIT (1985) 156 ITR 714 (Raj). The second submission of the learned counsel for the petitioner was that under section 47 of the Registration Act, if a document is registered, it would relate back to the date of execution of the document and, therefore, the deed of settlement, though registered on 8-6-1970, would take effect from 12-2-1970, and the gift would be chargeable to tax under the Gift Tax Act for the assessment year 1970-71. In this connection, learned counsel relied upon the decision of the Gujarat High Court in Arundhati Balkrishna v. CIT (1982) 138 ITR 245 (Guj), the decisions of the Supreme Court in Hamda Ammal v. Avadiappa Pathar 1991 (1) SCC 715 and Thakur Ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Gift Tax Act is a self-contained enactment and in view of the wide definition of the term. "gift", many acts and transactions which may not amount to gift under the Transfer of Property Act, would be regarded as a gift under the Gift Tax Act. The Rajasthan High Court noticed the decision of the Andhra Pradesh High Court in V.G. Krishna Rao v. Addl. GTO (1968) 70 ITR 812 (AP) and held that considerations arising from the definition of gift in the Transfer of Property Act cannot be imported while construing the provisions of the Gift Tax Act and the Rajasthan High Court held as under : "The Gift Tax Act is a self-contained code in itself Thus, it is obvious that the legislature did not adopt the definition of gift from the Transfer of Property Act as has been done in other cases mentioned above. From the above, it is clear that gift under section 2(xii) includes certain transfers detailed in section 4(1) and (2) of the Gift Tax Act also. Many acts and transactions which shall not amount to gifts under the Transfer of Property Act shall amount to gift under the Gift Tax Act. The concept of gift under the Gift Tax Act is much wider. The Gift Tax Act include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gift within the meaning of the Gift Tax Act. 9. Under section 2(xii) of the Gift Tax Act, for a valid gift to be made there must be a transfer by one person to another of any existing movable or immovable property and, therefore, unless there is a valid transfer of the property in the eye of law, there is no gift for levy of gift-tax under the Gift Tax Act. The definition of the expression, "transfer of property" enlarging the meaning of transfer for the purpose of the Gift Tax Act also does not in anyway dispense with the requirement of registration of the deed of settlement settling an immovable property favouring a donee. It is well established that section 2(xxiv) of the Gift Tax Act also contemplates a bilateral transfer and unless the document transferring immovable property is validly registered, there is no gift under the Gift Tax Act. 10. Learned counsel for the petitioner also referred to the ExpIn. to section 2(xii) of the Gift Tax Act and submitted that transfers made by a person in possession of the property in part-performance of the contract or by a person who is regarded as the owner under section 27(iiia) or 27(iiib) of the Income Tax Act are also regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrument of gift was handed over by the donor to the donee and the gift would become effective from the date of execution since registration of the document does not depend upon the consent of the donor, but it is the act of an officer appointed by law for that purpose and the transaction of the gift would become complete on the date on which the document was executed and not on the date on which it was subsequently registered. The Gujarat High Court in the above case has held as under : "............... the transaction of gift is complete if the other formalities are completed and the document of gift is executed and that the donor cannot resile from his action before the document is registered. The ratio of both the decisions of the Privy Council is to the effect that a transaction of gift by a document which is subsequently registered becomes operative from the date on which the document of gift was executed. 12. Learned counsel referred to the decision of the Supreme Court in the case of Hamda Ammal v. Avadiappa Pathar (supra) wherein the appellant before the Supreme Court purchased a property from the respondents/vendors by a sale deed executed in her favour in Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale is completed cannot be said to have been completed earlier because by virtue of section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date." 15. The scope of section 47 of the Registration Act was again the subject-matter of consideration before the Supreme Court in Hiralal Agrawal v. Rampadarath Singh (supra) and the Supreme Court reiterated the position that sale would become complete only when the registration of the sale deed takes place and not before. 16. The Gujarat High Court in the case of Darbar Shivrajkumar v. CGT (1981) 131 ITR 647 (Guj) following the above two decisions of the Supreme Court held that transaction of a gift of immovable property would be complete only on registration of the document and prior to the registration of the document, the transaction is not complete and there is no gift in the eye of law. The court held as under : "Since on a combined reading of sections 122 and 123 it is evident that the transaction of gift would be complete provided and only provided a registered document is executed and other conditions are fulfilled, it cannot be said that the transaction wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Darbar Shivrajkumar v. CGT (supra) and the decision of the Calcutta High Court. in CGT v. Smt. Aloka Lata Sett (supra). 20. The next question that arises is that the determination of market value by the Commissioner is correct. I find some force in the submission of the learned counsel for the petitioner. The Commissioner has found that the value of the property was determined at ₹ 1,30,000 by the Gift Tax Officer without any basis. The Commissioner however determined the value of the property gifted at ₹ 1,20,180 on the basis of the guideline value of the Registration department. It is well settled that guideline value regarding valuation of the property has evidentiary value and they are only intended to give information or instruction to the registering authorities but the guidelines, as such would not establish the market value of the land. In the decision of this court in M. Ponnusamy & Ors. v. District Collector, Erode & Ors. 1999 (2) L. W 231, E. Padmanabhan, J. after referring to earlier cases on the topic has held that the guideline value cannot be regarded as a conclusive evidence regarding market value of a land. 21. The Supreme Court in Rames ..... X X X X Extracts X X X X X X X X Extracts X X X X
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