Gift-tax on immovable property arises only on registration; deemed gift was not taxable in the year under appeal.

For gift-tax purposes, transfer of immovable property is completed only on execution and registration of the conveyance, and section 47 of the Registration Act, 1908 does not advance completion to the date of execution. On that basis, the alleged deemed gift from the sale was not chargeable in the assessment year under appeal, so the original assessment was not erroneous or prejudicial to the revenue. The article also notes that a fresh revisionary notice under section 24(2) was not barred merely because an earlier vague notice had been cancelled, and that valuation material could be examined in a fresh assessment after cancellation of the original order.

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Issues: (i) Whether the Commissioner could issue a fresh notice under section 24(2) after cancelling the earlier notice, (ii) whether the Commissioner was justified in invoking section 24(2) on the basis of valuation material and in directing a fresh assessment, and (iii) whether the alleged deemed gift arising from the sale of the immovable property was chargeable in the relevant assessment year.

Issue (i): Whether the Commissioner could issue a fresh notice under section 24(2) after cancelling the earlier notice.

Analysis: The earlier notice was cancelled as vague and not as a disposal of the revisionary proceedings on merits. Nothing in section 24(2) prohibited the Commissioner from commencing the revisionary process again, provided the statutory conditions and limitation were satisfied. The later notice clearly set out the basis of proposed action and was therefore valid.

Conclusion: The fresh notice and continuation of proceedings under section 24(2) were valid.

Issue (ii): Whether the Commissioner was justified in invoking section 24(2) on the basis of valuation material and in directing a fresh assessment.

Analysis: The valuation report was not shown to be wholly unreliable. When an assessment is set aside and a fresh assessment is directed, the assessing authority is free to examine valuation afresh and is not confined to the original basis of assessment. Likewise, once the original assessment is cancelled, the fresh assessment need not necessarily be confined to the same sub-section under which the cancelled order was made.

Conclusion: The Commissioner was not wrong in directing a fresh assessment, but this did not by itself justify interference if the original assessment was otherwise not erroneous.

Issue (iii): Whether the alleged deemed gift arising from the sale of the immovable property was chargeable in the relevant assessment year.

Analysis: Gift-tax on immovable property becomes attracted only on completion of transfer. A sale or transfer of immovable property is completed only upon execution and registration of the conveyance, and the relation-back effect of section 47 of the Registration Act, 1908 does not advance the completion of the transaction to the date of execution for this purpose. Applying that principle, the transfer in question was completed only in the subsequent assessment year, not in the year under appeal.

Conclusion: The deemed gift was not taxable in the relevant assessment year and the original assessment was not erroneous or prejudicial to the interests of the revenue.

Final Conclusion: The revisionary order could not stand because the underlying premise that the sale gave rise to a taxable deemed gift in the relevant year was incorrect; the assessment under section 15(1) was therefore valid.

Ratio Decidendi: For gift-tax purposes, transfer of immovable property is completed only upon registration of the conveyance, and section 47 of the Registration Act, 1908 does not make the transfer complete from the date of execution.

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