JUDGMENT
A.S. Venkatachalamoorthy, J.
1. The assessee is the absolute owner of the property bearing Door No. 15, Whites Road, Madras. It gifted a portion of the said land comprising of 5500 sq. ft. with the building thereon to one Shri. Rajasekar under a gift deed dated 7.2.1985. The said document was however registered long thereafter that was on 30.09.1987. The assessee filed the return for the assessment year 1988-89, admitting taxable gift of Rs. 2,70,000/-. The Assessing Officer referred the question of valuation of this gifted property to the Departmental Valuation Officer and on the basis of the report, he adopted the value of the gifted property at Rs. 10,77,240/-. Aggrieved by this, the assessee preferred an appeal to the Commissioner (Appeals), contending that the gift was effected by a deed dated 7.2.1985 and that the donee was put in possession of the property on the very same day and as such, the value of the gifted property should be brought to tax in the assessment year 1985-86. This plea of the assessee was accepted by the Commissioner (Appeals) who directed the Assessing Officer to assess the value of the gift in the relevant accounting year 1985-86 and not 1988-89. The Department preferred an appeal before the Income Tax Appellate Tribunal, contending that the Commissioner (Appeals) failed to note that transfer of the immovable property is complete only when the document of transfer is registered and hence, assessment could not be made in the year 1985-86. The Appellate Tribunal however dismissed the appeal filed by the Revenue holding that the assessment of gift made by the assessee in question should be considered in the assessment year 1985-86 and not in the assessment year 1988-89.
2. The question is, whether the gift of an immovable property is the date of document or the date of registration of the document?
3. Section 122 of the Transfer of Property Act defines the term ‘gift’ to mean transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person to another.
Section 123 of the Transfer of Property Act lays down that for the purpose of making a gift of immovable property transfer must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses.
4. In the Gift Tax Act, again, the term ‘gift’ is defined in Section 2(xii) as under:-
” In this Act, unless the context otherwise requires,–
“gift” means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money’s worth, and [includes the transfer or conversion of any property referred to in Section 4, deemed to be a gift under that section].
[Explanation.– A transfer of any building or part thereof referred to in clause (iii), clause (iiia) or clause (iiib) of Section 27 of the Income-tax Act by the person who is deemed under the said clause to be the owner thereof made voluntarily and without consideration in money or money’s worth, shall be deemed to be a gift made by such person;]”
The terms ‘transfer of property’ is also defined in Section 2(xxiv) of the Gift Tax Act as any disposition, conveyance, assignment, settlement, delivery etc. Section 61 of the Registration Act specifies as to when registration of a document be deemed complete.
5. The Supreme Court, in the ruling (Ram Saran v. Domini Kuer), ruled that the registration under the Registration Act is not complete till the document to be registered has been copied out in the records of the Registration Office as provided in Section 61 of the Act and that Section 47 of the Registration Act has nothing to do with the completion of the registration and therefore nothing to do with the completion of a sale when the instrument is one of sale. The Court also ruled that a sale which is admittedly not completed until the registration of the instrument of sale 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.
6. Again, the Supreme Court, in the ruling (Smt. Gomatibai (Dead) through Lrs. & Ors. v. Mattulal (Dead) through Lrs.), held that in the absence of any registered instrument of gift and acceptance thereof by the donee, the said property could not be said to have been legally transferred. Or in other words, the gift is not complete in the eye of law.
7. Learned counsel for the assessee, pointing out Section 2(xxiv) of the Gift Tax Act and the ruling (Hamda Ammal V. Avadiappa Pathar), would contend that once a document is registered, it will relate back to the date of execution of the deed and that delivery was effected immediately on the execution of deed that was on 7.2.1985 and hence the Tribunal is right in holding that gift made by the assessee should be considered in the assessment year 1985-86.
8. In Thulasimani Ammal v. CIT ((2000) 108 Taxman 426), this Court considered the various rulings and held as under:-
“Under Section 2(xii), 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 Act. The definition of the expression ‘transfer of property’ enlarging the meaning of transfer for the purpose of the Act, also does not in any way 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) also contemplates a bilateral transfer and unless the document transferring immovable property is validly registered, there is no gift under the Act.”
In that case, the Court also pointed out that transfer of property would become complete only by registration of the document and that, though, by virtue of Section 47 of the Indian Registration Act, it would relate back to the date of execution, in such cases, insofar as third parties are concerned, particularly, the tax authorities, the relevant date for the levy of tax is the date of registration of the document.
9. In fact, earlier, a Division Bench of the Calcutta High Court, in the ruling reported in 190 ITR 556 (C.G.T. v. Smt. Aloka Lata Sett), took a similar view. We are in entire agreement with the above ruling and the view taken by the learned single Judge of this Court in Thulasimani Ammal V. CIT (referred supra).
10. Learned counsel for the assessee then put forth a submission that in 108 Taxman 426 (referred supra), the Court was considering a case pertaining to the assessment year 1971-72 and that the Act was subsequently amended by adding an explanation clause to Section 2(xii) of the Gift Tax Act for the definition of the term ‘gift’ and hence that ruling would not apply.
11. We do not see any substance in this submission. The explanation clause, we find, it does not in any way militate against the fulfillment of the requirements of Section 123 of the Transfer of Property Act for a valid gift to be made by those persons mentioned in Section 27(iiia) or 27(iiib) of the Income-tax Act. We put a pointed question to the learned counsel as to under which of the three categories in the explanation clause that the assessee comes. The learned counsel stated, the assessee would come under Section 27(iiia) of the Income Tax Act. Section 27(iiia) refers to a person, who is allowed to take or retain possession of any building or part thereof in part performance of a contract. In the Income Tax Act, such a person will be considered as “owner of house property” for the purposes of Sections 22 to 26 of the Act, that is, to find out the income from the house property. We do not understand as to how the assessee would come under the said category.
12. In this view of the matter, we hold that the relevant date for consideration is only the date when the document was registered.
We answer the question in favour of the revenue and against the assessee.