Existing proprietary interest transferred in praesenti: reserved life interest did not make the gift one of future property.

The transfer of a half share in a medical shop, including medicines and furniture, was treated as a gift of existing property under the Gift-tax Act, 1958 because the settlement deed passed the donor's proprietary interest in praesenti. Reservation of a life interest to enjoy profits did not make the transfer a gift of future property, and authorities on joint family property were inapplicable since the assets were not joint family property and the donor could dispose of them. The reference was answered against the assessee, and the gift was held taxable.

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Issues: Whether the transfer of a half share in a medical shop with medicines and furniture amounted to a gift of future property or a gift of existing property under the Gift-tax Act, 1958.

Analysis: The statutory definitions of gift, transfer of property, and property were broad enough to include any interest in movable or immovable property. The settlement deed effected a transfer of the donor's proprietary interest in the existing business assets in praesenti, while reserving only a life interest to enjoy the profits. Such reservation of limited enjoyment did not convert the transaction into a gift of future property. Authorities dealing with joint family property were inapplicable because the gifted assets were not joint family property and the donor had power to dispose of them.

Conclusion: The transfer was a valid gift in praesenti of existing property and not a gift in futuro; the question was answered in the negative, in favour of the department.

Final Conclusion: The reference was answered against the assessee, and the gift was held taxable under the Act.

Ratio Decidendi: A transfer of an existing proprietary interest in movable property is a gift in praesenti under the Gift-tax Act even if the donor reserves only a limited life interest in the enjoyment of the profits.

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