Unilateral surrender and life-interest release do not constitute a gift unless statutory requirements and lack of bona fides are shown.

A unilateral document executed by an assessee did not amount to a "transaction" under section 2(xxiv)(d) of the Gift-tax Act because that provision contemplates an act involving two or more parties; it therefore did not constitute a gift under section 2(xii). A surrender or release of life interest was also not a deemed gift under section 4(1)(c) because the deeming provision applies only where the release is not bona fide, and no lack of bona fides was found or established. On both statutory grounds, the document was held outside gift-tax liability.

---

---

Issues: (i) Whether the unilateral document executed by the assessee on 30 March 1964 amounted to a transaction falling within section 2(xxiv)(d) of the Gift-tax Act and thereby constituted a gift under section 2(xii). (ii) Whether the assessee's surrender or release of life interest attracted section 4(1)(c) of the Gift-tax Act as a deemed gift.

Issue (i): Whether the unilateral document executed by the assessee on 30 March 1964 amounted to a transaction falling within section 2(xxiv)(d) of the Gift-tax Act and thereby constituted a gift under section 2(xii).

Analysis: Section 2(xxiv)(d) applies only to a transaction entered into by a person with the intent to diminish his own property and increase the value of another's property. The governing principle is that the expression contemplates an act to which two or more persons are parties. A unilateral act by a single person does not satisfy the statutory requirement of a transaction. The document in question was executed unilaterally by the assessee in exercise of powers reserved under the earlier wakf deed.

Conclusion: The document did not fall within section 2(xxiv)(d) and did not constitute a gift under section 2(xii).

Issue (ii): Whether the assessee's surrender or release of life interest attracted section 4(1)(c) of the Gift-tax Act as a deemed gift.

Analysis: Section 4(1)(c) deems a release, surrender or abandonment of an interest in property to be a gift only to the extent that it is not found to be bona fide. The record showed no finding that the assessee's surrender was not bona fide, and the revenue had not contended otherwise before the taxing authorities. In the absence of any lack of bona fides, the statutory deeming provision could not be invoked.

Conclusion: Section 4(1)(c) was not attracted.

Final Conclusion: The gift-tax reference failed and the taxability of the 30 March 1964 document was negatived on both statutory grounds.

Ratio Decidendi: A unilateral act does not amount to a transaction under section 2(xxiv)(d) of the Gift-tax Act, and a surrender of interest cannot be deemed a gift under section 4(1)(c) unless it is shown to be not bona fide.

---