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Srinath Das vs Income-Tax Appellate Tribunal, Delhi ... on 19 July, 1974 cites

Bhau Ram Jawaharmal vs Commissioner Of Income-Tax, U. P. on 23 March, 1971

11. So far as this court is concerned, the law on the subject has been laid down in the case, Bhau Ram Jawaharmal v. Commissioner of Income-tax [1971] 82 ITR 772 (All), wherein it has been held by a Division Bench that in order to sustain a gift it is not necessary that in every case there should be a physical delivery of the amount gifted by the donor to the donee. A transfer can be effected in the books of the donee-firm by making a debit entry in the account of the donor, and making corresponding credit entry in the account of the donee. So long as entries made in the respective accounts put the gifted amount beyond the control of the donor and result in his ownership in it being replaced by the ownership of the donee, there is no reason why a valid gift cannot be effected through such book entries. In this case the court drew a distinction between cases where entries are made in the accounts of the donor and the donee maintained in the books of third party holding money to the credit of the donor, and a case where the donor purports to effect the transfer by making entries in his own books. In the latter case it would be possible for the donor who makes the transfer entries in his books to reverse the same without the donee coming to know of the same and as such it may not be possible to say that delivery of the gifted amount has taken place. However, in a case where such entries are made under the directions of the donor in the books of a third party it would not be possible for the donor to get those entries reversed by his unilateral action. In the instant case, the transfer entries were made in the books of the firm as distinguished from the personal books of the petitioner. Merely because the petitioner was a partner in the firm, in whose books these entries were made, it cannot be said that the books of the firm were his personal books which could be dealt with by him in any manner that he chose. Moreover, the respondents admit that, ever since the making of the gift, interest accruing on the amount gifted was being credited in the account of the donee and ultimately the donee withdrew the entire amount from the firm and invested the same elsewhere. There is nothing on the record to show that after the amount together with interest thereon had been credited in the personal account of the donee, the petitioner could exercise any dominion over the same, We are, accordingly, of opinion that in this case, after relevant entries were made in the books of the firm, the dominion and control over the sum of Rs. 20,000 passed from the donor to the donee and the gift in question was quite valid and complete.
Allahabad High Court Cites 11 - Cited by 14 - Full Document
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