Book-entry gifts can be valid when control passes, but gift-tax appeals need a statutory objection to be maintainable.

Under section 22(1) of the Gift-tax Act, an appeal lies only where the assessee disputes the value of the taxable gift, the amount of tax determined, or liability to assessment; since none of those objections was raised, the appellate authorities had no jurisdiction to entertain the appeals. The document also states that a gift can be completed by properly recorded book entries when the donor is divested of dominion and the donee acquires control, even without physical delivery. On the facts noted, the transfer through the firm's books was treated as valid and complete, while the assessment of the taxable gift remained undisturbed.

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Issues: (i) Whether the appeals before the appellate authorities were maintainable under section 22(1) of the Gift-tax Act, 1958; (ii) whether the gift made through entries in the books of the firm was invalid or incomplete.

Issue (i): Whether the appeals before the appellate authorities were maintainable under section 22(1) of the Gift-tax Act, 1958.

Analysis: A right of appeal under section 22(1) arises only where the assessee objects to the value of the taxable gift, objects to the amount of gift-tax determined as payable, or denies liability to be assessed under the Act. The assessee throughout insisted that the gift was valid and did not challenge the valuation, the tax determined, or liability to assessment. On that footing, no appeal lay before the Appellate Assistant Commissioner and consequently no second appeal lay before the Tribunal.

Conclusion: The appeals were not maintainable, and the appellate orders made on the merits were without jurisdiction.

Issue (ii): Whether the gift made through entries in the books of the firm was invalid or incomplete.

Analysis: A valid gift does not in every case require physical delivery. Where debit and credit entries in the books place the gifted amount beyond the donor's control and transfer dominion to the donee, a gift can be completed by book entries. Here the amount stood in the donor's personal account in the firm's books, the transfer was recorded in those books, interest was credited to the donee, and the donee later withdrew the amount. The donor's status as a partner did not, by itself, prevent him from dealing exclusively with the amount standing to his credit.

Conclusion: The gift was valid and complete.

Final Conclusion: The writ petition succeeded to the extent that the finding invalidating the gift was quashed, but the assessment order as to the taxable gift was left undisturbed.

Ratio Decidendi: A gift may be effectively completed by properly recorded book entries when the donor's dominion over the property is divested and the donee acquires control, and appellate jurisdiction under section 22(1) of the Gift-tax Act, 1958, arises only when one of the statutory grounds of objection is actually raised.

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