Registered transfer required for gift of immovable property despite wider gift-tax treatment of deemed gifts.

A gift of immovable property must comply with the Transfer of Property Act and the Registration Act, so a registered instrument is required for a valid transfer. The Gift-tax Act, 1958 has a wider tax definition of gift and may include deemed gifts under section 4, but that enlargement does not dispense with the basic requirement of a legally effective transfer. A deemed gift cannot validate an otherwise ineffective conveyance of immovable property. The question was answered against the assessee and in favour of the Revenue.

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Issues: Whether a transfer of immovable property by way of gift can be treated as valid under the Gift-tax Act, 1958 without compliance with the requirement of registration under the Transfer of Property Act, 1882 and the Registration Act.

Analysis: A gift of immovable property under the Transfer of Property Act, 1882 requires a registered instrument. The definition of gift under the Gift-tax Act, 1958 is wider and may include deemed gifts under section 4, but that does not dispense with the basic requirement that there must be a valid transfer of property. Where the subject-matter is immovable property, the general law continues to apply, including the requirement of registration under the Registration Act. A deemed gift under the Gift-tax Act does not by itself validate an otherwise ineffective transfer.

Conclusion: The transfer was not valid without registration, and the question was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: The Gift-tax Act, 1958 enlarges the class of transactions taxable as gifts, but it does not abrogate the general law requiring a registered instrument for a valid transfer of immovable property.

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