Law: Income Tax Act, 1922

Section:

(a) Income tax---Gift--Validity--Essentials--Gift of property by father to his minor children-­ When and how complete--Acceptance of gift made by father on behalf of minors by mother--Legality. Under the Muslim law gift' `can- be made orally and writing is not essential to the validity of the gift. The essential requirement of the gift is that the donor should divest himself completely of all ownership and dominion over the subject-matter of gift and relinquish his control over the subject-matter in favour of the donee. According to Muslim Law there are three essential ingredients which must be complied with for a valid gift to come into existence. They are (1) a declaration of gift by the donor, (2) an acceptance of the gift, express or implied, by or on behalf of the donee; and (3) delivery of possession of the subject matter of the gift by the donor to the donee. Delivery of possession of the subject matter of the gift by the donor to the donee, either physically or constructively is necessary to complete a gift. In the absence of delivery of possession by the donor to the donee the gift would be incomplete and therefore, void and even the execution of a deed of gift and its registration would not cure the absence of delivery of possession. However,- in the case of a gift by a father to his minor child, neither acceptance of gift nor formal delivery of-possession is required and all that is required to be established is a bona fide intention to make the gift. This does not mean that in such a gift the law does not require the transfer of possession from the donor to the donee. No actual or physical delivery of possession is required in such a gift but symbolic or constructive transfer of possession does take place from the father to the minor donees and the father is the person to receive the possession on behalf of his minor children as under the Muslim Personal Law the father is the guardian of the property of minor. The following persons given in order are entitled to the guardianship of the property of a minor namely: (1) the father, (2) his executor, (3) the father's father and (4) his executor. Thus no change of possession is necessary in the case of a…

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