Gift-tax liability on cheque endorsement turns on beneficial ownership, and no taxable gift arises where the assessee is only a conduit.

Endorsement of a cheque by an assessee to his daughter was not a gift chargeable to gift-tax where the amount was, on the facts and agreement between the parties, intended for and payable to the daughter. The assessee had no beneficial interest in the money and acted only as a conduit in receiving and passing on the cheque. As there was no voluntary transfer of the assessee's own property or beneficial interest without consideration, no taxable gift arose under the Gift-tax Act, 1958; the question was answered in favour of the assessee.

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Issues: Whether the assessee's endorsement of a cheque for Rs. 4 lakhs in favour of his daughter constituted a gift chargeable to gift-tax under the Gift-tax Act, 1958.

Analysis: The amount represented by the cheque was found, on the facts and the agreement between the parties, to have been intended for and payable to the daughter. The assessee had no beneficial interest in the amount and acted only as a conduit in receiving the cheque and passing it on by endorsement. In the absence of any conscious transfer of the assessee's own property or assets, the act of endorsement could not amount to a voluntary transfer without consideration within the meaning of gift.

Conclusion: The endorsement did not constitute a gift chargeable to gift-tax and the question referred was answered in the affirmative, in favour of the assessee.

Ratio Decidendi: A gift under the Gift-tax Act requires a voluntary transfer of the assessee's own property or beneficial interest without consideration; where the assessee has no beneficial interest and merely passes on property belonging to another, no taxable gift arises.

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