Transferable booking rights can form part of a taxable gift when transferred without consideration.

A booking or allotment benefit conferring an existing transferable right was treated as property capable of valuation for gift-tax purposes. The transfer of booked flat accommodation was not confined to the cash already paid to the builders; it also included the benefit of the booking agreement and the associated right of allotment. Because that right was voluntary, transferable and without consideration, it formed part of the taxable gift and could be valued at open market value. The existence of the right of allotment and its transfer to the donees were upheld, and the valuation on that basis was sustained in favour of the Revenue.

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Issues: (i) Whether the assessee's transfer of the booked flat accommodation and the benefit of the agreement with the builders constituted a taxable gift includible beyond the amount paid; (ii) Whether a transferable right of allotment existed and stood transferred along with the gift.

Issue (i): Whether the assessee's transfer of the booked flat accommodation and the benefit of the agreement with the builders constituted a taxable gift includible beyond the amount paid?

Analysis: The expression "gift" under section 2(xii) of the Gift-tax Act covers transfer of existing movable or immovable property made voluntarily and without consideration. The arrangement showed that the assessee did not merely pass on money already paid to the builders; he also transferred the benefit of the booking agreement and the rights attached to it. Such rights were capable of valuation on the date of transfer by reference to what they would fetch in the open market. The subject was therefore not confined to the cash outlay alone.

Conclusion: The transfer amounted to a taxable gift and the valuation could include the right transferred; the issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether a transferable right of allotment existed and stood transferred along with the gift?

Analysis: The assessee had obtained an enforceable benefit under the booking arrangement after making payments and securing the builders' acceptance of the substitution of his children as nominees. That benefit constituted property for gift-tax purposes, and the right was not merely personal or illusory. On the facts, the right of allotment existed and passed with the transfer in favour of the donees.

Conclusion: The existence and transfer of the right of allotment were upheld; the issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered in favour of the Revenue, holding that the assessee transferred a valuable taxable right in addition to the monetary amounts already paid, and the resultant gift-tax valuation was sustainable.

Ratio Decidendi: For gift-tax purposes, a booking or allotment benefit that confers an existing transferable right is property capable of valuation at its open market value and is includible as part of the taxable gift when voluntarily transferred without consideration.

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