Unaccepted gift not taxable: completed transfer and donee acceptance are essential before gift-tax liability can arise.

A gift under the Gift-tax Act requires a completed transfer of existing property and acceptance by the donee; an intended gift that is never accepted and is later repudiated does not become chargeable to gift-tax. The text explains that, although the Act does not expressly restate acceptance, the concept of transfer under the Act and the general law of gifts indicate that completion is essential. On the stated facts, the donees were unaware of the credited amounts, later disclaimed them, and returned the money, so the gifts never matured into completed transfers. Accordingly, the revised nil returns were treated as correct and no taxable gift arose.

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Issues: Whether an intended gift under the Gift-tax Act is complete when the donee has not accepted the gifted amount and later returns it to the donor.

Analysis: The definition of "gift" under section 2(xii) of the Gift-tax Act contemplates a transfer by one person to another of existing movable or immovable property made voluntarily and without consideration. Though the Gift-tax Act does not expressly repeat the requirement of acceptance, the concept of transfer in section 2(xxiv) and the general law of gifts under section 122 of the Transfer of Property Act show that a gift necessarily involves a completed transfer to a donee. On the facts, the intended donees were not aware of the gifts when the amounts were credited, and they later disclaimed and returned the money. The intended gifts therefore never attained completion.

Conclusion: The gifts were not complete without acceptance by the donees, and the revised returns declaring nil taxable gift were rightly accepted.

Final Conclusion: The Revenue's appeals failed because the transactions did not mature into completed gifts chargeable to gift-tax.

Ratio Decidendi: Under the Gift-tax Act, a gift is not complete unless there is a completed transfer to and acceptance by the donee; an unaccepted and repudiated intended gift does not give rise to taxable gift liability.

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