COMMISSIONER OF INCOME TAX, JAIPUR versus SIREHMAL NAWALAKHA

Citation: [2001] SUPP. 1 S.C.R. 615 · Decided: 16-08-2001 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

.. 
COMMISSIONER OF INCOME TAX, JAIPUR 
A 
v. 
SIREHMAL NA WALA KHA 
AUGUST 16, 2001 
[B.N. KIRPAL AND SHIVARAJ V. PATIL, JJ.] 
B 
.Gift Tax Act, 1958: Sections 2(xii), 4(1) (c) and (d)-Gift of immovable 
property by unregistered document-Held, for a valid gift under ;>ection 2 
(xii) and (4) compliance with the provisions of Transfer of property Act and 
Registration Act necessary-Transfer of Property Act, 1882--Sections 122 C 
and 123-Registration Act, 1908--Sections 17. 
Words & Phrases: 
"Gift"-Meaning of in the context of Section 2(xii) of Gift Tax Act, 1958 
and Section 122 of the Transfer of Property Act, 1882. 
D 
Respondent, by an unregistered declaration sought to make a gift of 
certain immovable property to his wife. The Gift Tax Officer held that no 
valid gift had been made by respondent since the provisions of Section 123 
of the Transfer of Property Act, 1882 had not been complied with. The said E 
findings were affirmed by the Assistant Commissioner and the Tribunal. 
However, on reference, the High Court observed that the definition of the 
word 'gift' under the Gift Tax Act, 1958 was wider than the definition of 'gift' 
in the Transfer of Property Act, and held that registration of document was 
not necessary for a valid gift under Section 4 of the Act. Hence the present 
appeal by Revenue. 
Allowing the appeal, the Court 
F 
HELD : 1.1. High court erred in coming to the conclusion that the 
case fell within the provisions of Section 4 of the Gift Tax Act, 1958 and, 
therefore, as it was a deemed gift it was not necessary that the document had G 
to be registered.1619-H; 620-AI 
1.2. There can be no doubt that certain transactions may not be 
regarded as a gift for the purposes of the Transfer of Property Act but would 
fall within the ambit of the expression 'gift' by virtue of Section 4 of the Gift 
615 
H 
616 
SUPREME COURT REPORTS (2001] SUPP. l S.C.R. 
A Tax Act, but in each one of the cases which in certain circumstances is to 
be regarded as a gift under Section 4 there has to be a transfer of immovable 
property and a transfer by reason of Section 17 of the Registration Act can 
only be by way of a registered document. Surrender or forfeiture of an 
interest in immovable property as contemplated by Section 4(1) (c) or vesting 
B of any property in another person as contemplated by Section 4(1) (d) in the 
case of an immovable property would also attract the provisions of Section 
17 of the Registration Act. (618-G-H; 619-A, B, Cl 
1.3. In order that there could be a transfer of property by way of gift 
as contemplated by the Transfer of Property Act, there has to be a registered 
C document ifthe property sought to be transferred is immovable. The general 
law did not stand abrogated and the requirement of complying with the 
provisions of the Transfer of Property Act and the Registration Act had to 
be fulfilled. (617-F, 619-G-H[ 
Commissioner of Gift Tax, Kera/av. R. Va/sala Am ma, 82 ITR 828 (SC), 
D relied on. 
Smt. Padma lalchand Mirchandani v. Commissioner of Income Tax, 
New Delhi, 128 ITR 174 (Delhi); Commissioner of Gift-tax, Som.bay Ill v. 
Matilda Ferreira, 112 ITR 934 (Bombay); K. Madhavakrishnan v. 
Commissioner of Gift-tax, Tamil Nadu, 124 ITR 233 (Madras) and Darbar 
E Shivrajkumar v. Commissioner of Gift-tax, Gujarat-IV, 131 ITR 647 (Gujarat), 
approved. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6725 of 
1994. 
F 
From the Judgment and Order dated 12.2.1985 of the Rajasthan High 
Court in Income Tax Ref. No. 27/75. 
B.B. Ahuja, K.C, Kaushik, Rajiv Tyagi, R.R. Dwivedi and B.V. Bairam 
Das for Ms. Sushma Suri for the Appellant. 
G 
N.M. Ranka, Sushi! Kumar Jain and Raj Kumar Yadav for the Respondent. 
The Judgment of the Court was delivered by 
KIRPAL, J. The respondent was the owner of immovable property and 
by declaration dated I Oth October, 1966 he sought to give a gift of certain 
H out-houses attached to a building to his wife. 
C.I.T. v. SI REH MAL NA WALAKHA [KIRPAL, J.] 
617 
The declaration which was made was not registered. The Gift Tax Officer A 
rejected the respondent's claim that a valid gift had been made as, according 
to him, there had not been any compliance with the provisions of Section 123 
of the Transfer of Property Act. The Assistant Commissfoner and the Tribunal 
took the same view and thereafter following question of law was referred to 
the High Court by the Tribunal : 
"Whether on the facts and circumstances of the case, the Tribunal 
was 

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