Deemed gift under Gift-tax Act requires proof of inadequate consideration; stamp duty value and unclear entries are not enough.

For invoking deemed gift treatment under section 4(1)(a) of the Gift-tax Act, the revenue must affirmatively prove that the stated sale consideration was false and that the transfer occurred for inadequate consideration on reliable evidence. Corrections in Form No. 34A created suspicion, but there was no statement from the seller or buyers and no independent material to displace the registered sale deed. Stamp-duty valuation also could not by itself establish market value for direct tax purposes, especially for tenanted property with valuation disadvantages. The ambiguous entries in Form No. 34A were not a clear admission, so the deemed gift addition was not sustainable.

---

---

Issues: Whether the difference between the consideration declared in the registered sale deed and the value noted in Form No. 34A and for stamp duty purposes justified treating the transaction as a deemed gift under section 4(1)(a) of the Gift-tax Act.

Analysis: The corrections and overwritings in Form No. 34A created suspicion, but suspicion could not substitute proof. The revenue had to establish that the apparent consideration in the registered deed was not true and that the property had been transferred for inadequate consideration. No statement of the seller or buyers was recorded and no independent material was brought to show that the declared sale price was false. The value fixed for stamp duty also could not, by itself, determine market value for direct tax purposes, particularly where the property was tenanted and its peculiar disadvantages were relevant to valuation. The ambiguous entries in Form No. 34A were not a clear and unambiguous admission capable of founding a deemed gift.

Conclusion: The deemed gift addition was not sustainable and the revenue failed to prove transfer for inadequate consideration.

Ratio Decidendi: For invoking section 4(1)(a) of the Gift-tax Act, the revenue must affirmatively prove inadequate consideration on reliable evidence; an unclear admission or stamp-duty valuation alone is insufficient.

---