Latest Supreme Court Ruling on Gift

Key Legal Principles Established

1. Validity of Gift Deeds:
2. A claim based on a gift deed must be supported by evidence of acceptance. If the gift deed is unconscionable or lacks the consent of other surviving interest holders, it cannot be sustained Kamalini Dei (Since Dead) through her LRs VS Kunti Dei (Since Dead) through her LRs - Orissa (2022).

3. The Supreme Court has ruled that for a valid gift of movable property, the requirements of the Indian Trusts Act, 1882, Section 6 must be fulfilled, which includes the intention to create a trust, the purpose of the trust, the beneficiary, and the trust property Mrs. Ida L. Chambers VS Kelland Huxford Chambers - Madras (1940).

4. Conditions for Completion of a Gift:

5. The Supreme Court in the case of S. Sarojini Amma v. Velayudhan Pillai Sreekumar held that a conditional gift where possession remains with the donor is considered incomplete. The donor retains the right to cancel the deed if the conditions are not met Sasikala VS Revenue Divisional Officer cum Sub Collector, Devakottai, Sivagangai District - Madras (2022)J. Logeswaridas VS Sachin Sandeep - Madras (2021).

6. The court emphasized that a gift does not become complete during the lifetime of the donor if the possession is not delivered to the donee SEHDEV SINGH VERMA VS J P S VERMA - Delhi (2015).

7. Acceptance of Gifts:

8. Acceptance of a gift can be presumed, especially in cases involving minors, where the acceptance can be made by the parents on behalf of the minor P. K. SUBRAMONIA IYER VS COMMISSIONER OF GIFT TAX - Kerala (1967).

9. The Supreme Court has clarified that the absence of overt acts signifying acceptance does not invalidate the gift if the donee is a minor P. K. SUBRAMONIA IYER VS COMMISSIONER OF GIFT TAX - Kerala (1967).

10. Tax Implications:

11. The Supreme Court ruled that a sum paid as a gift is not taxable if it is clearly stated as a gift by the donor, distinguishing it from payments made in lieu of services Mahesh Anantrai Pattani VS Commissioner Of Income-tax, Bombay North, Ahmedabad - Supreme Court (1960).

Summary of Findings

• The latest rulings emphasize the necessity of acceptance and the conditions under which a gift deed can be considered valid.
• The courts have clarified that gifts must be completed with the delivery of possession, and conditional gifts may remain revocable if conditions are not fulfilled.
• The legal framework surrounding gifts, particularly in the context of Hindu law and the Indian Trusts Act, is crucial for determining the validity and implications of gift deeds.

Recommendations

• Ensure that any gift deed executed includes clear evidence of acceptance and delivery of possession to avoid disputes.
• Consider the implications of conditional gifts and the rights of the donor to revoke such gifts if conditions are not met.
• Be aware of the tax implications associated with gifts to ensure compliance with the Income Tax Act.

References: Kamalini Dei (Since Dead) through her LRs VS Kunti Dei (Since Dead) through her LRs - Orissa (2022)Sasikala VS Revenue Divisional Officer cum Sub Collector, Devakottai, Sivagangai District - Madras (2022)J. Logeswaridas VS Sachin Sandeep - Madras (2021)SEHDEV SINGH VERMA VS J P S VERMA - Delhi (2015)Mahesh Anantrai Pattani VS Commissioner Of Income-tax, Bombay North, Ahmedabad - Supreme Court (1960)P. K. SUBRAMONIA IYER VS COMMISSIONER OF GIFT TAX - Kerala (1967)Mrs. Ida L. Chambers VS Kelland Huxford Chambers - Madras (1940)]