Book entries cannot transfer immovable property without registration, so no deemed gift arises under the Gift-tax Act.

Book entries alone did not validly transfer immovable property from the assessee to a partnership firm where no registered conveyance was executed and the partnership deed did not show the property was brought into common stock. The entries merely adjusted the assessee's debit balance while leaving his capital account unchanged, indicating the asset was not contributed as partnership capital. As a transfer of immovable property requires a registered instrument, the alleged conveyance was ineffective in law. On that basis, the statutory condition for a deemed gift under section 4(1)(a) of the Gift-tax Act, 1958 was not satisfied.

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Issues: Whether the assessee's transfer of immovable property to the partnership firm by mere book entries, without a registered conveyance, amounted to a valid transfer giving rise to a deemed gift under section 4(1)(a) of the Gift-tax Act, 1958.

Analysis: The property continued to belong to the assessee until the alleged transfer. The partnership deed did not show that the property had been brought into the common stock, no separate document of conveyance was executed, and the entries in the firm's books only wiped out the assessee's debit balances while leaving his capital account unchanged. A partner may have a dual capacity as partner and creditor under the Partnership Act, but the facts showed that the property was not contributed as capital; it was said to have been transferred in satisfaction of the assessee's debt. For a transfer of immovable property, book entries by themselves do not effect a conveyance in law, and a registered instrument was necessary. Since the property was not validly transferred, the foundational requirement for invoking deemed gift provisions failed.

Conclusion: The transfer was not valid in law and no deemed gift arose under section 4(1)(a) of the Gift-tax Act, 1958.

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