Registered instrument requirement for immovable gifts defeats gift-tax where family settlement and decree did not pass title.

Transfer of agricultural land under a family settlement and court decree was analysed under gift-tax law, with emphasis on whether a valid transfer had occurred without registration. The text states that an immovable-property gift requires a registered instrument, and absent registration title does not pass. It also notes that a collusive decree may bind the parties in civil law but does not bind the tax department. On those facts, the transaction was treated as not constituting a valid gift, and the land was not chargeable to gift-tax.

---

---

Issues: Whether the transfer of agricultural land under the family settlement and court decree, without registration, constituted a gift exigible to gift-tax.

Analysis: The dispute concerned immovable property covered by a family settlement. The Court held that if the family settlement and decree were treated as non est, the Revenue could not rely on them as a transfer; in substance, there was no transfer of the land. The Court relied on the principle that a gift of immovable property requires a registered instrument and that, in the absence of registration, title does not pass. It further noted that a collusive decree may bind the parties for civil rights but is not binding on the tax department. On these facts, the transaction did not amount to a valid gift within the meaning of the gift-tax law.

Conclusion: The issue was decided in favour of the assessee and the land was held not chargeable to gift-tax.

---