Acceptance by the donee is essential before a gift can be brought to gift-tax under the Gift-tax Act.

A gift is not exigible to gift-tax under the Gift-tax Act, 1958 unless it is complete in law through acceptance by or on behalf of the donee. The text reads the charging provision and statutory definitions harmoniously with section 122 of the Transfer of Property Act, 1882, treating acceptance as an essential element of a valid gift and noting that a gift is void if the donee dies before acceptance. On that basis, the contrary view that acceptance is unnecessary for taxability is rejected, and the answer on the stated facts is in favour of the assessee.

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Issues: Whether a gift is exigible to gift-tax under section 3 of the Gift-tax Act, 1958 unless it has been accepted by the donee.

Analysis: Gift under the Gift-tax Act was construed with reference to the charging provision and the definitions of gift, transfer of property, donor, and donee. The reasoning proceeded on the basis that a gift, where it is a gift under the general law, is not complete merely by execution of the instrument; it must acquire the necessary bilateral character through acceptance by or on behalf of the donee. The concept of transfer under the Act was read harmoniously with the general law contained in section 122 of the Transfer of Property Act, under which acceptance is an essential element and a gift is void if the donee dies before acceptance. The contrary view, that acceptance was unnecessary for taxability, was rejected.

Conclusion: Acceptance by the donee is necessary before a gift can be taxed under section 3 of the Gift-tax Act, 1958, and on the facts the answer is in favour of the assessee.

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