A valid gift requires the transfer of ownership of the gifted property from the donor to the donee and that the donee must acquire complete control over the property. The gift must also be accepted by the donee.

, J.

1. This order will dispose of three connected Wealth-tax References Nos. 4 to 6 of 1971, which relate to the assessment years 1964-65, 1965-66 and 1966-67, respectively.

2. The following question of law has been referred to us for opinion by the Income-tax Appellate Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no valid gifts had been made by the assessee ?"

3. The assessee in this case is an individual, Sheo Narain, by name and he is carrying on the business in utensils in Rewari, District Gurgaon. On 21st May, 1955, he is alleged to have made a gift of Rs. 28,000 each in favour of his three sons, Satya Narain, Radhe Sham and Suresh Chand. The latter two were minors. He made this gift by debiting his own account with Rs. 84,000 and crediting Rs. 28,000 each in the accounts of his three sons. In subsequent years, the income from interest on these amounts was also credited to the individual accounts of the sons. In the assessment year 1957-58, Sheo Narain claimed deduction of interest on Rs. 84,000 credited to the accounts of his sons, but the said claim was rejected by the Income-tax Officer. This order was confirmed by the Appellate Assistant Commissioner, who found that there was no evidence on the record to show that the donees, especially the minors, had accepted the gifts. The Appellate Assistant Commissioner was further of the opinion that the assessee had not divested himself of Rs. 84,000 by merely making transfer entries in his books of account, while the said amount remained in his own business. As a result, he held that the gift was not a bona fide one. It appears that the assessee did not claim any deduction of interest credited to the accounts of his sons in subsequent years. In the assessment year 1964-65, it appears that he again claimed such a deduction, but the Income-tax Officer held that a finding had already been given by the Appellate Assistant Commissioner for the assessment year 1957-58 against the assessee, who had not brought any fresh material on the basis of which the previous finding could be reversed. The officer, therefore, disallowed the deduction of interest. This order was upheld on appeal by the Appellate Assistant Commissioner, and, thereafter, by the Appellate Tribunal on 26th September, 1957, and the Tribunal held that there was no valid gift made by the assessee.

4. It appears that Sheo Narain became assessable under the Wealth-tax Act for the first time in the assessment year 1963-64. There he called in question the amount of Rs. 84,000, which was included in his wealth by the officers under that Act. The said authorities came to the conclusion that there was no valid gift effected by the assessee by making mere book entries. On appeal, the Tribunal, however, on 25th November, 1967, held that the said gift was valid and in calculating the total wealth of the assessee, the gifted amount together with interest was, therefore, excluded. In arriving at this conclusion, the Tribunal simply followed the decision of this court in Balimal Nawal Kishore v. Commissioner of Income-tax, [1966) 62 I.T.R. 669 (Punj.) as the same was binding on it. When the assessees appeal for the assessment years 1964-65, 1965-66 and 1966-67 came before the Appellate Assistant Commissioner of Wealth-tax, he followed the Tribunals decision relating to the assessment year 1963-64. The department then filed appeals before the Tribunal and contended that the decision in Balimal Nawal Kishores case was distinguishable from the facts of the instant case, because the entries in that ruling had been made in the books of the firm, over which, apart from the donor, there were others, who exercised control. In the present case, however, the entries had been made in the assessees own books of account, over which he alone had complete control and domain and he could later on delete or reverse them at any time he liked. The department urged that the case