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TMI Blog1982 (8) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... settlements were registered on March 30, 1970, two deeds of revocation came to be executed and registered later cancelling the earlier settlements. The GTO, however, did not accept the assessee's claim. He was of the view that the two settlements were validly drawn up instruments and were in force until revoked, and that the settlement deeds were registered on March 30, 1970, though the deeds of revocation came to be drawn up on April 5, 1970, which indicated that the settlements were intended to be given effect to notwithstanding the deeds of revocation. According to the GTO, the title to the agricultural lands gifted in favour of the assessee's brother's daughters had passed to the donees, even according to the recitals in the revocation deeds. The assessee also put forward a case before the GTO that the settlement deeds executed in favour of Pramodhini and Anuradha were in contravention of the provisions of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, hereinafter referred to as the Land Reforms Act, and, therefore, the settlements cannot be taken to be taxable gifts. The GTO, however, rejected the said contention of the assessee on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, on the other hand, contended before the Tribunal that though the G.T. Act did not refer to acceptance of the gift in the definition of a " gift ", it could not be read de hors the general law relating to the process by which a gift could be validly effected, that, unless there is acceptance by the donees of the settlements in question, they cannot be taken to be clear gifts chargeable to gift-tax. In support of the said contention, the assessee relied on the decision of the Kerala High Court in CGT v. Kesavan Nair [1974] 96 ITR 365. The assessee also contended that the settlement deeds have been executed by the assessee for the purpose of reducing his liability under the Land Reforms Act; that they are void under s. 22 of the Land Reforms Act; and that as such they could not be taken to be valid for the purpose of the G.T. Act. The Tribunal after considering the above rival contentions held that though as per the definition of " gift " under s. 2(xii) of the G.T. Act, the consent of the donee is not a sine qua non for validity of the gift as was the case in the definition of " gift " contained in s. 122 of the Transfer of Property Act, that the definition of the word " donee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive notwithstanding want of consent on the part of the minor donees as contended by the Revenue, whether the settlement deeds will be invalid under the provisions of the Land Reforms Act and as such cannot attract gift-tax ? On the first question, the GTO held that notwithstanding want of consent on the part of the donees, the transactions will be chargeable to gift-tax as the definition of the word " gift " in the G.T. Act does not contemplate the consent being obtained from the donees to make the gift an effective one. The AAC took a different view and he held that want of consent on the part of the donees coupled with the fact that they have taken steps to have the gift deeds revoked within a few days, would indicate that the property never passed to the donees under the gift deeds and that, therefore, there was no valid and effective gift in favour of the donees which could be brought under the G.T. Act. The Tribunal has also held that though consent is not contemplated by the definition of " gift in s. 2(xii) of the G.T. Act, the other definitions in the Act, particularly the one dealing with donee, would indicate that consent or acceptance of the donee is essential to vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this case, the settlement deeds have been executed on February 21, 1970, and March 4, 1970, which are after the notified date. All transactions which took place after the notified date and before the publication of a notification under sub-s. (1) of s. 18 of the Act have been declared to be void by s. 23, as amended, with retrospective effect from April 6, 1969. Though s. 23 was amended after the settlements have been executed, as the amendment has taken effect retrospectively from April 6, 1969, the settlement deeds executed in this case in 1970 will also come within the mischief of s. 23. It cannot be disputed that the settlement deeds came to be made after the notified date and before the publication of a notification under s. 18(1). As a matter of fact, even the AAC refers to the proceedings of the authorised officer ignoring the settlement deeds executed by the assessee in favour of his brother's minor daughters and including the lands gifted in their favour in the holding of the assessee. Thus, it is clear that the authorised officer has proceeded on the basis that the settlement deeds are void and, therefore, they have to be ignored under s. 23 for the purpose of fixing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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