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'If there is acceptance of the gift after execution of the deed, even though the registration was postponed to a later date, the gift would become irrevocable. The fact that the deed was executed and registered would not make it irrevocable, if, in fact, there was no acceptance by the donee, either before registration but after execution or even after registration. What the law requires is acceptance of the gift after its execution though the deed may not be registered. Anterior negotiations or talks about the transfer of property by way of gift would not amount to acceptance of the transfer of the property by gift. Acceptance may be implied but the facts relied on to draw an inference of acceptance must be acts of positive conduct on the part of the donee or persons acting on his behalf and not merely passive acquiescence such as standing by when the deed was executed or was registered.' This shows that mere standing by when the deed was executed or registered will not be sufficient to prove acceptance. It is true as pointed out by the learned counsel for the appellant that it was extremely probable that Arunachalam was standing beside his father Varadaiya Chetty when Ex. A1 was registered. But that alone will not amount to acceptance. The learned counsel for appellant submitted that the title deeds were with the appellant, so this should prove delivery and acceptance. Even regarding the title deeds in the plaint, the appellant had averred that Varadaiya Chetty had insisted and prevailed upon the plaintiff to give the documents of tile relating to the suit property. From this the learned counsel wanted to draw the conclusion that custody of the title deed would show acceptance. However, in the evidence she has stated that, (vernacular matter omitted-Ed.) Therefore, even with regard to custody of title deeds, the evidence and the pleadings are very unsatisfactory. But it must be remembered that it is Arunachalam who ought to have accepted the settlement deed for the settlement deed to come into effect. On the date of the settlement deed, Ajit Kumar's right was still depending upon Arunachalam not having any natural children of his own. If a son or daughter had been born to Arunachalam, then the clause in the settlement in favour of Ajit Kumar would have no effect. Therefore, what is crucial in this case is acceptance by Arunachalam for the gift deed to come into effect. There is not an iota of evidence to show that Arunachalam had accepted the gift. In the absence of pleadings and other evidence, I do not think this court sitting in second appeal can draw inference merely from the fact that Arunachalam must have stood by the time of the registration of Ex. A1 and arrive at the conclusion that the deed was accepted."

But in the provisions of section 122 of the TP Act, the element of acceptance of gift is present. This issue has been largely dealt with in the Commentary by Chaturdevi & Pithisaria's Income Tax Law, Vol. 9, 4th Edn. at p. 1552 which is being reproduced as it is :

"Acceptance of the donee, whether essential under the Gift Tax Act?Unlike the provisions of section 122 of the TP Act, 1882, section 2(xii) of the Gift Tax Act does not specifically refer to the acceptance of the gift by the donee. In other words, the element of acceptance of the gift by the donee is lacking in the definition of the expression 'gift' in section 2(xii) of the Gift Tax Act, whereas under section 122 of the TP Act, 1882, that element is also present. On a comparison of the phraseology of the two provisions, one may argue that in order to constitute a valid gift under the Gift Tax Act, it is not essential that the donee should have accepted the gift. Such an argument cannot be accepted especially in view of the definition of 'donee' [s- 2(viii) as a person who acquires any property under a gift]. The meaning of the word 'acquire' as given in Chambers' Twentieth Century Dictionary is 'to gain', to attain to'; Shorter Oxford English Dictionary gives the meaning as acquired : 1 To gain, to get as one's own (by one's own exertions or qualities). 2. To receive, to come into possession. This connotes that the person concerned should have a positive mental attitude 'to gain', 'to get as one's own, to receive or to come into possession of'. Moreover, under section 29 of the Gift Tax Act, the donee can be called upon to pay the tax if the assessing officer is of the opinion that the same cannot be recovered from the donor. It does not seem to be that the intention of the legislature was to make a person liable for tax in respect of a transaction which he does not agree to or even repudiates. If such an argument is accepted, the result will be that the donee can be made liable for tax even in cases where he repudiates the gift, for the taxable event arises on the donor executing the gift deed. The question of acceptance of the gift by the donee is closely related to the question whether the donor has perfected the gift on his part. It is a well-accepted principle of law that a conveyance takes effect only if the interest created thereby vests in the transferee, and such vesting can never take place without the transferee's consent and concurrence. In that view of-the matter, the acceptance of the donee is also essential under the Gift Tax Act [CGT v. R. Kesavan Nair (1974) 96 ITR 365 (Ker)] However, according to the Andhra Pradesh High Court in Vadulla Venkata Rao v. CGT (1972) 85 ITR 249 (AP), the acceptance of gift by a donee or some one on his behalf does not appear to be a specific requisite condition for a gift under the Gift Tax Act."

2. The donor.

3. The donee.

4. The subject-matter.

5. The transfer.

6. The acceptance Going through these essential elements, it is seen that the acceptance is an essential element and as in the present case the gift deeds executed by the donor in favour of the donee clearly states that he has transferred all the rights and ownership and given the same to the donee as gift vide document executed and he has also agreed that from that day onwards the donee will have and hold the scheduled properties and pay the Government taxes in her name and take pattayam and have rights of transaction and enjoyment forever. In view of this registered gift deed, the mutation of property was done on the application of the donee which is evident from the copies of the revenue records supplied by the village officer, Athirampuzha of the land revenue department of the State Government. Here, I do not agree with the finding of the CGT(A) that, all the requirements of the TP Act cannot be held to be met by virtue of the fact that the acceptance of the gift by the donee has not been established beyond doubt by the assessing officer. After effecting the transfer on the basis of gift deeds, the donee has also paid land revenue tax in respect of the properties under reference which is very clearly evident from the revenue records. In view of this, I have no hesitation in holding that the donee has accepted the gift. There is no other requirement under the TP Act and no other legal formalities to be left to execute the mutation effecting in favour of the donee. In the revenue register, it is a clear cut fact and that also on the basis of application submitted by the donee as is evident from the revenue records, the donee has accepted the gift. In my view, where the deed of gift was delivered by the donor to the donee and delivery of the deed and on the basis of the deed mutation effecting in revenue records, this is sufficient for acceptance of transfer within the meaning of the sections 122 and 123 of the TP Act. Further, the plea of the assessee that the transfer of the property was not accepted by the respondent-assessee's daughter and she has not taken the possession of the said landed properties or dealt with the same in any manner. The documents were cancelled considering the fact that respondent-assessee's daughter who has just completed 18 years and was doing her B.Com. course would not be in a position to manage the said properties and if the properties were transferred in her name, the property may fall in somebody's hands. I do not agree for this preposition that the donee being 18 years and studying in B.Com cannot accept the gift. Even in the TP Act, the donee is a person who accepts the gift. A gift may be accepted by or on behalf of a person who is not competent to contract. A minor may therefore, be a donee, but if the gift is onerous, the obligation cannot be enforced against him. The words "accepted by or on behalf of the donee" shows that the donee may be a person unable to express the acceptance. A gift can be made to a child en ventre sa mere and could be accepted on its behalf. In this case, mutation is complete in the transaction of the property and there is no question of non-acceptance. In view of this, I have no hesitation in holding that the transfer is complete in view of the provisions of sections 122 and 123 of the TP Act.

(Underlined, italicized in print, to emphasize) About acceptance of gift and on mutation of entries in the revenue record, the assessing officer has observed as under :

"The assessee has in his letter dated 28-10-1999 further argues that the gift is not complete unless it is accepted by the donee. In support of this, the assessee has placed reliance upon a decision of the Hon'ble High Court of Kerala in CGT v. R. Kesavan Nair (1974) 96 ITR 365 (Ker). According to the assessee, the donee in this case has not accepted the gifted property and hence the gift has not become complete. This argument of the assessee is without any merit. The village documents are the fundamental documents with regard to immovable properties and their ownership. Whenever a transfer is effected in respect of an immovable property by way of document registered in the office of the Sub-Registrar, a corresponding transfer should be effected in the village records also to make the transfer complete. Then only, the transferee can effect payment of land tax in her favour in respect of the property so transferred. In this case, I have made verification with the concerned village office and it is informed by the village officer, Athirampuzha in his letter No. 18/2001, that transfer has been effected in respect of properties comprised in his territorial area which are under consideration in this assessment order. After effecting the transfer in the village documents in favour of the donee in this case, land tax has also been paid by the donee, Ms. Sunitha Kurian in respect of the properties under reference. In respect of certain properties lying in the territorial area of village officer, Ettumanoor also, transfer has been effected in the village records in favour of the donee and also payment of land tax has been made by the donee herself in respect of the properties so transferred. For effecting the transfer in the village records consequent upon the transfer deed itself, the transferee who is to make an application to the village officer to effect the transfer reflected as per the transfer deed. Clearly, in this case, the donee, Ms. Sunitha Kurian has made application for transfer of documents as reflected in the transfer deed in the village records also, This shows that the donee in this case. Ms. Sunitha Kurian has given her concurrence or accepted the gift by her action in filing an application in village office for effecting transfer. Hence, any argument that the donee has not accepted the gift is of no avail. Therefore, the argument that 'the donee has not accepted the gift and so the gift has not become complete' is not at all correct and hence it is rejected. A copy of the letter of the village officer is annexed to this assessment order."