Book entries do not complete a gift or assign an actionable claim without proof of valid transfer and writing.

Mere book entries transferring amounts from an assessee's account to the accounts of his grandsons did not establish a completed gift, because the entries were not shown to be made in the regular course of business and no reliable contemporaneous instructions proved a valid transfer. The amount standing to the assessee's credit with the firm was treated as a debt and therefore an actionable claim; in the absence of a written instrument, no valid assignment could arise under the Transfer of Property Act. The asserted tripartite arrangement was also unsupported by proved facts.

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Issues: (i) Whether mere book entries transferring amounts from the assessee's account to the accounts of his grandsons constituted a valid gift in law; (ii) Whether the amount standing to the credit of the assessee with the firm was an actionable claim so that mere book entries could not amount to a valid assignment.

Issue (i): Whether mere book entries transferring amounts from the assessee's account to the accounts of his grandsons constituted a valid gift in law.

Analysis: The entries relied upon were not shown to have been made in the regular course of business and were held to lack evidentiary value. No reliable material established that a valid gift had been completed by the assessee in favour of the grandsons. The rejected affidavit and the absence of any proved contemporaneous instructions did not support the alleged gift.

Conclusion: Mere book entries did not constitute a valid gift in law.

Issue (ii): Whether the amount standing to the credit of the assessee with the firm was an actionable claim so that mere book entries could not amount to a valid assignment.

Analysis: The amount due from the partnership to the assessee was a debt and therefore an actionable claim. Such a claim could be transferred only by an instrument in writing as required by the Transfer of Property Act. In the absence of any written instrument, no valid transfer or assignment came into existence. The alternative theory of a tripartite arrangement was unsupported by the proved facts.

Conclusion: The transfer amounted to an actionable claim, and mere book entries did not constitute a valid assignment.

Final Conclusion: The assessee failed on both questions referred, and the additions were upheld.

Ratio Decidendi: Mere book entries, without proof of a bona fide completed transfer and without compliance with the statutory mode of assignment of an actionable claim, do not create a valid gift or valid assignment in law.

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