Law:

Section:

Section 22 of the Income-tax Act, 1961, read with section 123 of the Transfer of Property Act, 1882 - Income from house property - Chargeable as- - Assessment years 1967-68 to 1969-70 - Assessee executed a gift deed on 27-9-1964, gifting away his property 'Shalini Palace' to a co-operative education society for starting medical college - Gift deed was registered and possession of property was handed over to donee-society and from date of gift, it became responsible for payment of taxes, cess, etc., as absolute owner - On same day, he entered into agreement with said society, setting out conditions for utilization of gifted property and providing for payment of compensation in case of non-fulfilment of same - When property was sold in October 1968 without starting college and sale proceeds paid to assessee as compensation, Assessing Officer reopened assessment holding that gift was conditional gift and gifted property continued to be that of assessee, and income from said property was taxable in hands of assessee - Perusal of gift deed showed that gift was irrevocable and unconditional - Whether since conditions for transfer of immovable property by gift as contemplated under section 123 of the Transfer of Property Act, 1882, had been complied with, Tribunal rightly held that gift was valid gift and income from said property could not be included in assessee's total income - Held, yes FACTS The assessee was the owner of property called 'Shalini Palace'. He executed a gift deed on 27-9-1964 by gifting away 'SP' to a co-operative education society for the purpose of starting a medical college. The gift deed was registered on 7-10-1994. As per the clauses of the gift deed, the gift was unconditional and irrevocable and the possession of the gifted property was handed over to the donee-society and the doner had given up all his rights in the said property. On the same day, i.e., on 27-9-1964, the assessee entered into an agreement with the donee-society by setting out the conditions for utilisation of the gifted property. One of the important conditions was that if the terms of the agreement for utilisation were not followed, the donee-society would have to pay to…

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