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Issues: Whether the transfer entries made on 28 March 1957, together with the donees' written acceptances, constituted a valid and completed gift of the two sums so as to fall outside gift tax.
Analysis: The relevant test was whether there was a transfer of existing movable property made voluntarily and without consideration, and whether the transfer was completed by delivery in the sense recognised for movable property. The Court treated the simultaneous credit entries in the family firm's books and the donees' letters accepting the amounts and authorising their retention in the business as sufficient to show both transfer and acceptance. Applying the concept of delivery in section 123 of the Transfer of Property Act, read with the wide meaning of delivery in section 33 of the Sale of Goods Act, the Court held that the transaction put the amounts in the possession of the donor as holder for the donees and therefore amounted to delivery. The cited authorities relied on by the revenue were distinguished on their facts, especially where there was no acceptance, no available funds, or only unilateral book entries.
Conclusion: The gifts became complete on 28 March 1957 and were valid before the Gift-tax Act came into force; the answer to the referred question was in the affirmative and in favour of the assessee.
Ratio Decidendi: A gift of movable property may be completed by contemporaneous book entries coupled with the donee's acceptance and an arrangement that amounts to delivery under the law, even without physical handing over or a registered instrument.
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