1978 (11) TMI 86 - AT - Income Tax

ITAT Delhi-C annuls assessment citing non-assessable gift deed under Indian Registration Act

The ITAT Delhi-C annulled the assessment as the gift deed was not assessable in the relevant year due to the operation of s. 47 of the Indian Registration ... Registered document operates from date of execution - Section 47 Indian Registration Act, 1877 - completed gift takes effect from date of execution - annulment of assessmentRegistered document operates from date of execution - Section 47 Indian Registration Act, 1877 - completed gift takes effect from date of execution - Whether the gift deed operated from the date of its execution and thereby rendered the gift not assessable in the assessment year 1968-69 - HELD THAT: - The Tribunal held that s. 47 of the Indian Registration Act, 1877 provides that a registered document operates from the time it would have commenced to operate if no registration had been required or made, and not from the time of its registration. The gift deed in question was duly executed on 30th March, 1967 and was a completed gift on that date; although registration occurred on 14th April, 1967, the deed operates from 30th March, 1967. The Tribunal relied on the decision of the Allahabad High Court in Union Bank Ltd. vs. Mst. Ram Ratti & Others holding that a completed gift takes effect from the date of execution, and on the Supreme Court decision in K.J. Nathan vs. Maruthi Rao which applied s. 47 to give effect to the earlier date of operation of a registered instrument. Applying these authorities and the clear wording of s. 47, the Tribunal concluded that the gift fell outside the accounting year relevant to assessment year 1968-69 and therefore was not assessable in that year. The Tribunal also observed that the AAC ought not to have left the legal question open for fresh consideration by directing re-examination by the assessing officer, since the legal position under s. 47 was clear. [Paras 4, 5]The Tribunal annulled the assessment as the gift operated from the date of execution (30th March, 1967) and was not assessable in asst. yr. 1968-69.Final Conclusion: Appeal allowed; assessment annulled on the ground that the registered gift operated from the date of execution and therefore did not fall within the accounting year relevant to assessment year 1968-69. The ITAT Delhi-C annulled the assessment as the gift deed was not assessable in the relevant year due to the operation of s. 47 of the Indian Registration Act, 1877. The appeal was allowed. (Case: 1978 (11) TMI 86 - ITAT DELHI-C)