Gift-tax on immovable property turns on registration, while guideline value is only evidence and statutory relief remains available

For gift-tax purposes, a transfer of immovable property was treated as complete only on registration of the instrument required by law, not on execution or delivery alone, so the assessment year followed the year of registration. Guideline value was held to be only evidentiary and not conclusive of market value; the valuation was aligned with the assessee's approved valuer's report. Statutory relief under section 18A was treated as available as a matter of entitlement, and the absence of a specific claim before the assessing authority did not defeat it.

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Issues: (i) Whether a gift of immovable property became complete for gift-tax purposes on execution and delivery, or only on registration of the settlement deed; (ii) whether the market value adopted for the gifted property was validly fixed on the basis of guideline value; (iii) whether credit/relief under section 18A of the Gift Tax Act was available without a specific claim before the assessing authority.

Issue (i): Whether a gift of immovable property became complete for gift-tax purposes on execution and delivery, or only on registration of the settlement deed.

Analysis: The governing requirements for a valid gift of immovable property were held to be those in section 123 of the Transfer of Property Act, namely transfer by a registered instrument. The broad definition of "gift" in the Gift Tax Act did not dispense with the need for a valid transfer in law. Section 47 of the Registration Act, 1908 was construed as giving an operative date to a registered instrument, but not as making a transfer complete before registration. The earlier view that registration relates back to the date of execution was distinguished for the purpose of taxability in the hands of third parties, including tax authorities.

Conclusion: The gift became complete only on registration, so the relevant assessment year was correctly taken as the year of registration; this issue was against the assessee.

Issue (ii): Whether the market value adopted for the gifted property was validly fixed on the basis of guideline value.

Analysis: Guideline value was treated as only evidentiary and not conclusive of market value. The authority had not made an independent determination on relevant materials and had not adequately considered the valuer's report produced by the assessee. In the circumstances, instead of remitting the matter, the court accepted the valuation supported by the approved valuer's report to avoid further delay.

Conclusion: The market value was reduced to the value shown by the assessee's valuer, and this issue was in favour of the assessee.

Issue (iii): Whether credit/relief under section 18A of the Gift Tax Act was available without a specific claim before the assessing authority.

Analysis: The relief under section 18A was treated as a statutory benefit available under the Act for the relevant assessment year. Since it was a statutory entitlement, the absence of a specific claim before the assessing authority did not defeat the relief.

Conclusion: The assessee was entitled to the relief under section 18A, and this issue was in favour of the assessee.

Final Conclusion: The writ petition succeeded only to the extent of modification of valuation and grant of statutory relief, while the finding that the gift became complete on registration and was assessable in the year of registration was sustained.

Ratio Decidendi: For gift-tax purposes, a transfer of immovable property is complete only upon registration of the instrument required by law, and tax authorities may not treat execution or delivery alone as completing the gift.

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