Gift-tax applies only where ownership and voluntary transfer without consideration are proved; mere onward payment is not a gift.

A transfer is taxable as a gift only if the Revenue proves that the property belonged to the assessee and was voluntarily passed without consideration. On the facts discussed, the amount was stated to have been entrusted by another person for onward transfer to his daughter, and the Revenue did not establish ownership by the assessee or a true donor-donee relationship. Non-disclosure as a liability in the wealth statement was held insufficient by itself. The transfer was therefore not a gift within section 2(xii), and the addition failed.

---

---

Issues: Whether the sum of Rs. 1,50,000 transferred to the daughter and granddaughters was a gift chargeable to tax under the Gift-tax Act.

Analysis: To attract the definition of gift under section 2(xii), the Revenue had to show a transfer by the assessee of property belonging to him, made voluntarily and without consideration. The assessee produced a confirmation from Ramachandra Panicker stating that the money had been entrusted to the assessee to be passed on to his daughter as and when required. The Revenue did not examine the person who issued the confirmation or the alleged recipient, and the surrounding facts did not conclusively establish that the amount belonged to the assessee or that the transfer was voluntary in the sense required by the charging provision. Absence of disclosure as a liability in the wealth statement was not treated as sufficient by itself to establish a gift.

Conclusion: The transfer did not constitute a gift within the meaning of section 2(xii), and the addition was not sustainable.

Ratio Decidendi: A transfer is taxable as a gift only if the Revenue proves that the property transferred belonged to the assessee and was voluntarily passed without consideration; a mere payment on behalf of another person, without proof of ownership or donor-donee relationship, is not a gift.

---