Gift-tax on immovable property turns on registration: prior agreement or delivery does not complete the transfer in law.

For deemed gift-tax on immovable property, the transfer is completed only when the instrument required by law is executed and validly registered. Section 123 of the Transfer of Property Act requires registration for a gift of immovable property, and the wider definition of "transfer of property" in section 2(xxiv) of the Gift-tax Act does not remove that requirement. Section 47 of the Registration Act operates only after registration is complete and does not make an earlier agreement or delivery effective against the Revenue. The relevant date for levy is therefore the date of registration, when the transfer becomes complete in law.

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Issues: Whether the transfer of immovable property, for the purpose of deemed gift under the Gift-tax Act, became complete only on registration of the sale deed or could be treated as complete on the earlier agreement or delivery date.

Analysis: Section 123 of the Transfer of Property Act requires a registered instrument to effect a gift of immovable property. The expanded definition of "transfer of property" in section 2(xxiv) of the Gift-tax Act includes delivery and other modes of alienation, but it does not dispense with the statutory requirement of valid registration where immovable property is transferred by deed. Section 47 of the Registration Act operates only after registration is complete and does not make an unregistered or incomplete transfer effective for tax purposes against the Revenue. The legal position, as applied, is that for levy of gift-tax on immovable property, the relevant date is the date on which the registered instrument comes into existence and the transfer is completed in law.

Conclusion: The transfer was complete only on the date of registration of the sale deed, and the deemed gift arose on that date. The assessee's challenge failed.

Ratio Decidendi: For gift-tax on transfer of immovable property, the transaction is complete only upon execution and valid registration of the instrument required by law, and neither prior agreement nor delivery alone can substitute for that requirement.

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