https://www.taxtmi.com/caselaws?id=7752 A completed gift by book transfer can be valid without physical cash withdrawal where the assessee has sufficient capital balance, the amount is debited to the donor's account, credited to the donees' accounts, and interest is actually paid on those balances. Those facts show that the transaction is not a mere paper entry and that the gifts have been acted upon. Payment of interest to the donees is strong evidence of acceptance of the gifted corpus, and lack of cash balance alone does not invalidate the transfer. On that basis, the assessee was entitled to deduct the interest paid on the gifted amounts. en-us Wed, 25 Feb 1970 00:00:00 +0530 Wed, 18 Mar 2009 17:52:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7752 A completed gift by book transfer can be valid without physical cash withdrawal where the assessee has sufficient capital balance, the amount is debited to the donor's account, credited to the donees' accounts, and interest is actually paid on those balances. Those facts show that the transaction is not a mere paper entry and that the gifts have been acted upon. Payment of interest to the donees is strong evidence of acceptance of the gifted corpus, and lack of cash balance alone does not invalidate the transfer. On that basis, the assessee was entitled to deduct the interest paid on the gifted amounts. Case-Laws Income Tax Wed, 25 Feb 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7752