Per P.S. Kalsian, Accountant Member - The appeal is directed by the Revenue against the order of the CIT (Appeals) dated 16-7-1993.

2. The assessee is an owner of a plot of land measuring 4,012 sq. feet in Trichy. The assessee transferred his land to Ayyappa Family Trust in which the assessee’s two children alone are beneficiaries. The assessee executed an agreement dated 13-4-1981, for sale of the said plot for Rs. 55,000. The agreement dated 13-4-1981 was not registered. By a resolution dated 31-3-1984, Ayyappa Family Trust resolved that the machinery and furniture belonging to the trust shall be delivered by the trust at book value to the assessee and is to be adjusted against the sale consideration being the value of the plot. It was claimed by the assessee before the Assessing Officer that the sale consideration has been received on 31-3-1984 itself by book adjustment. No gift was involved in the transaction dated 22-11-1989 when the actual sale deed was registered in the trust. For the reasons mentioned by the Assessing Officer in the assessment order, he did not agree with the claim of the assessee.

According to the Assessing Officer, the ownership title in the land passes to Ayyappa Family Trust when the actual transfer of property took place. According to him, the sale deed was executed on 22-11-1989, and registered on 28-11-1989 as document No. 3644 of 1989. Therefore, title in the land passed to the Trust only on 22-11-1989 and not before that. The Assessing Officer, therefore, considered that since the plot of land has been transferred to the transferor for inadequate consideration, the provisions of section 4(1)(a) are applicable. The assessee himself valued the property in question at Rs. 1,68,000 in the document No. 3644 of 1989. The Registrar has valued the property at Rs. 2,80,000 and registered the said document on 28-11-1989 after receiving the necessary additional charges from the assessee. The difference between the market value of the property at Rs. 2,80,000 as well as the sale consideration of Rs. 55,000 received by the assessee was assessed to gift-tax under section 4(1)(a) of the Gift-tax Act. In first appeal, the CIT (Appeals) held that since the assessee had given possession of the land in 1978, there was a valid gift on that date. The CIT (Appeals), therefore, held that the assessment of gift in assessment year 1990-91 was unwarranted and allowed the appeal of the assessee. Aggrieved by the order of the CIT (Appeals), the department came in appeal before us.

3. It is argued by the learned Departmental Representative that the assessee has executed an agreement of sale on 13-4-1981, under which the assessee has agreed to sell the land measuring about 1½ grounds to the Ayyappa Family Trust for Rs. 55,000. It may be mentioned here that this agreement dated 13-4-1981 has been signed by the assessee, Dr. V. Srinivasan and his wife, Mrs. Usha Srinivasan representing the Ayyappa Family Trust. It seems that Dr. Srinivasan and Mrs. Usha Srinivasan are trustees of Ayyappa Family Trust for the benefit of their children. It is mentioned in the agreement dated 13-4-1981 that the possession of the land was given to Sri Ayyappa Family Trust for the construction of the building. According to the learned Departmental Representative, there was no transfer of the land on the date of agreement because neither the sale agreement nor the sale deed was registered on 13-4-1981. The sale deed was executed on 22-11-1989 and registered on 28-11-1989 as Document No. 3644 of 1989. Therefore, the actual transfer has taken place only on 28-11-1989 when the said sale deed was registered and not before that. He relied on the decision of the Supreme Court in the case of Alapati Venkataramiah v. CIT [1965] 57 ITR 185 and argued that transfer means that effective conveyance of the capital asset to the transferee. Delivery of possession of immovable property could not by itself be treated as equivalent to conveyance of the immovable