Gift-tax treatment of immovable property turns on proof of transfer date and reasonable valuation of gifted land.

Under gift-tax law, compulsory registration is not indispensable for a gift of immovable property, but a taxpayer relying on an earlier completion date must prove actual transfer on that date. In this matter, the claimed 1978 completion was not supported by reliable evidence of delivery of possession or related conduct, so the earlier date was not accepted. On valuation, the authorities' steep enhancement of the gifted lands was not backed by cogent material, while some uplift over acquisition cost was justified by the later gift date and surrounding circumstances. A moderated, reasoned valuation was therefore adopted on the available facts.

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Issues: (i) Whether the gift of immovable property was complete on the asserted date without compulsory registration; and (ii) whether the valuation adopted by the authorities for the gifted lands was justified.

Issue (i): Whether the gift of immovable property was complete on the asserted date without compulsory registration.

Analysis: The definition of "gift" and "transfer of property" under the gift-tax law does not import the requirement of compulsory registration applicable under general property law. A gift may, therefore, be valid for gift-tax purposes even if the document is unregistered. However, the party asserting completion on an earlier date must prove that the transfer was actually effected on that date. On the record, the assertion that possession was delivered and land revenue was paid from 1978 remained unsupported by any reliable material.

Conclusion: The gift was not proved to have been completed on 7 December 1978 and the assessee failed on this issue.

Issue (ii): Whether the valuation adopted by the authorities for the gifted lands was justified.

Analysis: The lands had been acquired shortly before the gift for a small price in public auction, and the Revenue did not place cogent material to justify the steep enhancement to Rs. 6,000 per acre. At the same time, the later date of gift and the surrounding circumstances showed that some increase over acquisition cost was warranted. The authorities' valuation was therefore discarded and a moderated estimate was made on a reasonable basis, taking into account acquisition cost, passage of time, and subsequent sale circumstances.

Conclusion: The valuation fixed by the authorities was set aside and the gifted property was valued at Rs. 32,800.

Final Conclusion: The appeal succeeded only in part, with the finding on completion of gift remaining against the assessee, while the valuation was substantially reduced in the assessee's favour.

Ratio Decidendi: Under the gift-tax law, registration is not indispensable for a gift of immovable property, but the party relying on an earlier completion date must prove actual transfer on that date; where valuation lacks cogent support, the authority must adopt a reasonable estimate based on relevant surrounding circumstances.

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