Deed registration essential for valid gift under Gift Tax Act | Market value set at Rs. 83,330

The court held that registration of the deed is essential for a gift to be valid under the Gift Tax Act. The market value of the gifted property was set at Rs. 83,330 based on the petitioner's valuation. The petitioner was granted relief under section 18A of the Gift Tax Act for stamp duty paid. The writ petition was disposed of with modifications, without costs.

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Issues Involved:
1. Validity of the gift for tax purposes.
2. Determination of the market value of the gifted property.
3. Entitlement to relief u/s 18A of the Gift Tax Act.

Summary:

1. Validity of the Gift for Tax Purposes:
The petitioner challenged the order of the Commissioner, Coimbatore, rejecting the revision petition filed u/s 24 of the Gift Tax Act, 1958. The petitioner argued that the gift was made during the financial year 1969-70, and thus the relevant assessment year should be 1970-71. The Gift Tax Officer, however, held that the registration of the deed on 8-6-1970 made the gift chargeable for the assessment year 1971-72. The Commissioner upheld this view, stating that ownership of immovable property passes only upon registration. The court held that the mere delivery of immovable property does not satisfy the requirements of section 123 of the Transfer of Property Act, and there would be no gift under the Gift Tax Act without registration. The court cited various judgments, including K. Madhavakrishnan v. CGT and Smt. Satyabati Goswami v. CGT, to support this view.

2. Determination of the Market Value of the Gifted Property:
The Commissioner determined the value of the property at Rs. 1,20,180 based on the guideline value of the Registration department, rejecting the petitioner's valuation of Rs. 83,330. The court noted that guideline values are not conclusive evidence of market value and that the Commissioner had not conducted an independent investigation. Given the age of the case, the court decided to accept the petitioner's valuation based on the valuer's report, setting the market value at Rs. 83,330.

3. Entitlement to Relief u/s 18A of the Gift Tax Act:
The petitioner claimed entitlement to relief u/s 18A of the Gift Tax Act for the stamp duty paid, despite not having claimed it before the assessing officer. The court held that the relief u/s 18A is a statutory right and directed the second respondent to pass orders in conformity with this judgment.

Conclusion:
The writ petition was disposed of with modifications, setting the market value of the property at Rs. 83,330 and granting relief u/s 18A of the Gift Tax Act. No order as to costs was made.

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