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Section 2(xii) of the Gift-tax Act, 1958 - Gift - Assessment year 1988-89 - Whether effective date of gift of an immovable property is date of registration of document and not date of document - Held, yes FACTS The assessee gifted a portion of land with a building thereon under a gift deed dated 7-2-1985 which was registered long thereafter on 30-9-1987. The assessee filed the return for the assessment year 1988-89 admitting taxable gift of certain amount. The Assessing Officer adopted the value of the said gifted property at a much higher figure on the basis of DVO's report. On appeal, the assessee contended that the gift was effected by a deed dated 7-2-1985 and the donee was put in possession of the property on the very same day and as such, the value of the gifted property should be brought to tax in the assessment year 1985-86. The Commissioner (Appeals) accepted the assessee's contention. On further appeal by revenue, the Tribunal upheld the order of the Commissioner (Appeals) by rejecting the contention of the department that the transfer of the immovable property was completed only when the document of transfer was registered and, hence, the assessment could not be made in the year 1985-86. On reference : HELD Section 123 of the Transfer of Property Act lays down that for the purpose of making a gift of immovable property transfer must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. [Para 4] In Thulasimani Ammal v. CIT [2000] 108 Taxman 426 (Mad.), the Madras High Court also pointed out that transfer of property would become complete only by registration of the document and that, though, by virtue of section 47 of the Indian Registration Act, it would relate back to the date of execution, in such cases, insofar as third parties are concerned, particularly, the tax authorities, the relevant date for the levy of tax is the date of registration of the document. [Para 12] The Explanation clause added to section 2(xii) does not in any way militate against the fulfilment of the requirements of section 123 of the Transfer of Property Act for a valid gift to be made by those persons mentioned in…

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