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TMI Blog1967 (2) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... tal to about Rs. 3,16,000 and then that account was debited by an amount of Rs. 3,00,000 and an identical amount was credited to a new account opened in the name of his minor son, Madhu Kant, on the same day. Six days later, on October 24, 1952, the assessee made a declaration on a stamp paper of Rs. 3 before the Presidency Magistrate, Esplanade, Bombay, stating therein that he had made a gift of Rs. 3,00,000 to his minor son, Madhu Kant, out of natural love and affection on October 18, 1952, by debiting his account in the partnership firm of M/s. Jethalal Gopalji Co. and crediting the account of the son, Madhu Kant, in the books of account of the said firm. The declaration further stated that in respect of the said sum of Rs. 3,00,000, gifted by him to his son, Shri Jadavji Pragji, the other partner of the firm would act as a trustee and guardian of his son and he alone would deal with the amount so gifted by him to his son and all the income in anywise arising therefrom. In subsequent years, the account of the said Madhu Kant was continued in the said partnership firm and interest on the amount was credited in the said account at the end of each account year. In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 3,00,000 by the assessee in favour of his son, Madhu Kant, and, consequently, the said amount remained as the assessee's own money and the interest paid on it was, therefore, rightly treated as interest received by the assessee. The same view was also taken by the appellate authorities in the wealth-tax assessments for the assessment years 1957-58 and 1958-59. Thereafter, on applications made by the assessee under the Income-tax Act for a reference in the income-tax assessment and under the Wealth-tax Act in the wealth-tax assessments, the Tribunal has made a consolidated reference and referred to this court the questions of law which arise on its orders in the said matters. The two questions relating to the income-tax assessment are as follows : " 1. Whether, on the facts and circumstances of the case, the gift of Rs. 3,00,000 by the applicant to his son, Madhu Kant, has been rightly treated as invalid ? and 2. Whether, on the facts and circumstances of the case, the Tribunal was justified in coming to the conclusion that Rs. 22,531 represented the income of the applicant and not that of the minor son of the applicant ? ". Of the two questions framed in connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged to have been gifted to the son still continues to be invested in the business in the same manner as before and that there is no evidence on record from which the acceptance of the gift either by his son or guardian could be inferred. The declaration, which the assessee made before the Presidency Magistrate, Esplanade, Bombay, on October 24, 1952, purported to state that Jadavji Pragji was to act as the trustee and guardian of the minor, but the Tribunal pointed out that there is no evidence on record showing that the said Jadavji had acknowledged even the fact of the gift. In these circumstances, according to the Tribunal, there being nothing beyond the book entries made in the accounts of the partnership and the declaration made by the assessee before the Presidency Magistrate which did not advance the matter any further, it could not be held that a valid gift in favour of the son was established. The assessee tried to rely before the Tribunal on the case of Commissioner of Income-tax v. New Digvijaysihji Tin Factory but the Tribunal found that the facts of the said case were clearly distinguishable from the facts of the present case and the said case, therefore, could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of the movables and the course of everyday dealings and practice can be regarded as constituting delivery may be sufficient. It is, however, clear that the mere making of entries in his own accounts by the donor or even in the accounts of a partnership of which he is a partner by opening another account in the name of the donee and transferring amounts to that account would not constitute either giving of the movables by the donor to the donee or the acceptance of the same by the latter. Mr. Mehta says that it is not the mere making of the book entries in the present case but there is a lot more, and, according to him, although mere book entries may not constitute a valid gift, the said entries along with the other evidence may still be sufficient to establish a proper and valid gift. Mr. Mehta says that the donor in the present case was the father of the donee, who was a minor and of whom the donor himself was the natural guardian. A gift by a father in favour of his minor son was not incapable of being accepted by him on behalf of the son and in such a case all that was necessary to be done by the father was to take out or set apart the amount from his moneys and hold i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Jadavji was a trustee in whom the money was to vest for the benefit of the minor, then the account in the partnership firm should normally be expected to be in the name of the trustee on behalf of the minor. Secondly, as the Tribunal has pointed out, there is nothing on record to show whether Jadavji has accepted the trust or whether he is even aware of the fact that he has been made a trustee and a guardian of the minor son in respect of the same. It will thus be seen that there is nothing in the present case excepting the entries and the unilateral declaration made by the assessee before the Presidency Magistrate. The said declaration is a private document and does not by itself create any rights in favour of the donee. In our opinion, therefore, the Tribunal was right in the view that it took that there was no valid gift of the amount by the assessee in favour of his minor son. Mr. Mehta has referred to us some decisions in support of his submissions that the requirements of a valid gift can be held to be established on the facts and circumstances of the case even in the absence of actual and physical giving over by the donor to the donee and the acceptance of the same by th ..... 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