Book-entry gifts are invalid without available funds or overdraft support, and mere accounting entries do not complete delivery.

Book entries can constitute a valid gift only if the donor has existing property and the transfer is supported by available funds or equivalent financial facilities to complete delivery. In the case of a non-banking concern without sufficient cash balance or overdraft facility, mere debit and credit entries do not amount to delivery under the Transfer of Property Act, 1882, even if the donees later accept or withdraw the credited amounts. On that basis, the alleged gifts were treated as invalid and the transferred sums remained includible in the assessee's net wealth for wealth-tax purposes.

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Issues: Whether gifts purportedly made by transfer entries in the books of a non-banking concern, without sufficient cash balance or overdraft facility, constituted valid gifts for wealth-tax purposes.

Analysis: A gift requires existing property and, in the case of movable property, delivery in the manner contemplated by the Transfer of Property Act, 1882. Book entries may evidence a valid gift only where the donor has sufficient credit balance or where the concern has the means, including overdraft facilities, to honour the transfer. Where the debtor concern is neither a banking concern nor equipped with overdraft facilities, and the relevant funds are not available on the date of the alleged gift, mere debit and credit entries do not amount to delivery or completion of the gift, even if the donees subsequently accept or withdraw the credited sums.

Conclusion: The alleged gifts were invalid and the amounts were rightly included in the assessee's net wealth.

Ratio Decidendi: A gift by book entries is valid only when the property is existing and available to the transferor through sufficient funds or equivalent financial facilities; absent such availability, mere entries in the books do not complete delivery or create a valid gift.

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