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TMI Blog1963 (8) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... entry was made in his accounts of ₹ 3,00,000 as donation to Bharatiya Gyan Pith, and a corresponding credit entry was made in the newly opened account styled as Bharatiya Gyan Pith Account . No cash payment in relation to this credit entry was made to that charitable institution in that year. But in the accounting year ending on the 31st October, 1949, the assessee debited the credit entry in the name of the charitable institution with a sum of ₹ 3,00,000 which represented the then value of the shares held in the books at ₹ 5,07,930. On behalf of the assessee it was contended before the Income-tax Officer that he had become indebted to the charitable institution in the accounting year 1947-48 to the extent of ₹ 3,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the circumstances of the case the loss of ₹ 2,12,540 is allowable as a revenue loss arising from the assessees share business ? On behalf of the assessee learned counsel put forward the argument that there was a valid gift of ₹ 3,00,000 to the Bharatiya Gyan Pith in the accounting year 1947-48 by the assessee and in lieu of actual payment of cash the liability of the assessee was discharged by him in the subsequent accounting year by transfer of the shares in question. It was, therefore submitted that there was a valid sale of the shares in the eye of law in the accounting year 1948-49 and the assessee was entitled to claim the allowance of ₹ 2,12,540 as revenue loss arising out of his share busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng year 1948-49 was not a transfer made to the charitable institution in consideration of a previous liability and the transaction is not tantamount to a sale of shares in the eye of law. The true position is that a gift of immovable property may be effected either by a registered deed or by delivery of possession. The law on the subject has been reviewed by Fry and Bowen L. JJ. in Cochrane v. Moore. In the course of their judgment, they stated as follows : ... according to the old law no gift or grant of a chattel was effectual to pass it whether by parol or by deed, and whether with or without consideration unless accompanied by delivery : that on that law two exceptions have been grafted, one in the case of deeds, and the other in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Privy Council in Hariram Serowgee v. Madan Gopal Bagla . In that case one Brijoomari carried on business on her own account and maintained account books. In 1896 she opened an account in the name of her granddaughter. This account was continued down to the granddaughters death in 1904. In 1901 this account was credited with a sum of ₹ 2,00,000 and in 1903 with a further sum of ₹ 31,000. It was alleged that these were gifts to the granddaughter by the grandmother. There was no evidence that the granddaughter ever knew what was done by the grandmother and the account was never operated upon. In these circumstances the Judicial Committee held that the accounts were themselves mere book entries and did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52, and he made the necessary entries in his account books on that date. On the 8th November, 1953, he instructed the joint family firm, which acted as his banker and with which he had an account, to debit him with the two sums and interest earned up to that date and credit the accounts of S and P with the corresponding amounts. The firm carried out the instructions and submitted a voucher which the assessee signed. In this state of facts it was held by the Bombay High Court that there was a valid and complete gift of shares by the assessee in favour of his son and daughter and so the interest on the amounts transferred to his son and daughter could not be included in the income of the assessee. In the present case the material facts are di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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