1. This appeal is directed against the order of the Appellate Controller passed in ED Appeal No. 45 (Hyd.) of 1977-78 dated 16-9-1982.
2. According to the facts of this case, Shri Syed Ahmed Hussain, a State Government pensioner, died on 20-7-1973. In response to a notice issued under Section 55 of the Estate Duty Act, 1953 ('the Act'), an account in ED-5A was rendered by 'the accountable person on 3-9-1975.
In the account rendered, it was stated that the deceased gifted away his agricultural lands on 2-4-1970. The deceased owned lands to the extent of 11 acres 30 guntas out of which he, during his lifetime, had sold away part of the land to Viswasnagar Co-operative Housing Society in the year 1964 through a registered sale deed for a consideration of Rs. 90,000. With regard to the remaining extent, it was contended that the deceased made an oral gift of the same to his wife and children on 2-4-1970. In support of this contention, a copy of the affidavit executed by Syed Ahmed Hussain has been filed before the Assistant Controller. It was also contended that these gifts were subjected to gift-tax. A copy of the gift-tax assessment order for the assessment year 1971-72 dated 6-3-1976 has also been filed before the Assistant Controller. Based on these materials it was urged that the deceased did not own any lands at the time of his death. The deceased also executed a will on 1-1-1967 which was got attested before a notary on 8-10-1967.
According to the Assistant Controller, no mention whatsoever has been made about the existence of the will nor anything has been mentioned to indicate the revocation of the will in the affidavit executed on 31-3-1972 before the notary public. Therefore, he was of the opinion that the affidavit is a got-up affair. According to the Assistant Controller, the basic requirement for the alleged gift has not been complied with. Firstly, according to the Assistant Controller, the property made under HIBA should be delivered in such a manner as is susceptible to being taken delivery by a donee and the same thing is absent. The copy of the mutation effected by the tehsildar clearly indicates that the mutation is on the death of the deceased and as per succession. There is no mention about the gift or the will. Thus, according to the Assistant Controller, it is clear that there had been no proper delivery of the gifted property in the eye of law. Secondly, the legal requirement that if any oral gift of immovable property made under Mohammedan law is reduced into writing then such an alienation or transfer requires registration. In this case, the affidavit was considered to be a settlement of immovable properties by the Assistant Controller. Accordingly, the Assistant Controller came to the conclusion that no valid gift has been made and the value of the entire extent of land passed on the death of the deceased should be subjected to gift-tax. The Assistant Controller also valued the land at Rs. 10 per sq. yd. on enquiries made with the registration department and eventually worked out the value at Rs. 1,85,000.
3. On appeal, the Appellate Controller, after elaborately going through the Mohammedan law on the point of HIBA came to the conclusion that (i) the so-called will executed on 1-1-1967 is not a valid will as per Mohammedan law; and (ii) the oral gift on 2-4-1970 is also a gift as per Mohammedan law inasmuch as the terms of the gift are supported by oral evidence and the delivery of possession was duly given and accepted by the donees as per rule of Mohammedan law. Accordingly, he held that the lands measuring 6 acres 15 guntas cannot be made subject to gift-tax. Hence, he directed the Assistant Controller to exclude the amount of Rs. 1,85,000 from the estate duty assessment in the case being the value of the agricultural lands at 6 acres and 15 guntas.
4. Aggrieved, the department filed the present appeal before the Tribunal. The learned departmental representative submitted that the Appellate Controller erred in holding that there was delivery of possession of the property, viz., agricultural land to the donee. It was further submitted that the AAC erred in ignoring the report of the tehsildar that the mutation was effected after the death on the application of the heirs of the deceased and that neither the donor nor the donee ever took steps for mutation of the property in the donee's name during the lifetime of the donor. He also pointed out that in the affidavit dated 31-3-1972, no mention was made about the existence of the will nor anything has been mentioned to indicate the revocation of the will dated 1-1-1967. Therefore, it was submitted that the order of the Appellate Controller may be set aside and that of the Assistant Controller may be restored.
5. We have also heard the learned counsel appearing for the accountable person who supported the order passed by the Appellate Controller.
6. The fact remains that the assessee owned lands to the extent of 11 acres 30 guntas out of which, during his lifetime, he has sold away a part of the land to Viswasnagar Co-operative Housing Society in the year 1964 through a registered sale deed for consideration of Rs. 90,000. With regard to the remaining extent of land, it was contended that the deceased made an oral gift of the same to his wife and children on 2-4-1970. In support of this contention, a copy of the affidavit executed by the deceased on 31-3-1972 was filed before the Assistant Controller. The deceased also executed a will dated 1-1-1967 which was got attested before a notary on 8-10-1967. In the said will, it was stated that all the properties, both movable and immovable, belonging to the deceased were bequeathed to his wife and children, both living and future issues. In the affidavit dated 31-12-1972 it was stated that on 2-4-1970, out of love and affection, the agricultural properties mentioned in the affidavit were given by way of HIBA to his wife and children. It was also stated that possession of the said properties were handed over to the donees and the donees have also accepted the HIBA in the manner known to Mohammedan law. According to Section 149 of the Mohammedan law, it is essential to the validity of a gift that there should be (i) a declaration of gift by the donor, (2) an acceptance of the gift, express or implied, by or on behalf of the donee and (5) delivery of possession of the subject of the gift by the donor to the donee as mentioned in Section 150 of the Mohammedan law.
If these conditions are complied with the gift is complete-Mohd.
Mustafa Ghazipur v. CIT 1970 ITJ 449, 1978 (All.) LJ 543. While dealing with possession in Outlines of Muhammadan Law by Asaf A.A. Fyzee, it was stated that: The general principle is that possession must be handed over ; to this rule there are certain qualifications and exceptions which we shall now proceed to consider.
Transfer of possession is not necessary (1) where the donor and the donee reside in the same house; (2) where the gift is from the husband to the wife or vice versa; (3) where the father or the mother makes a gift to child; (4) where a guardian makes a gift to the ward; (5) where a gift is made to a bailee in possession; or (6) where the Fatimid law is applicable.(p. 232) 7. In the matter of delivery of possession, Section 150 states that (1) it is essential to the validity of a gift that there should be a delivery of such possession as the subject of the gift is susceptible of-Sadik Husain v. Hashim Ali  43 IA 212. As observed by the judicial committee, 'the taking of possession of the subject-matter of the gift by the donee, either actually or constructively' is necessary to complete a gift-Mohammad v. Fakhr Jahan  49 IA 195. (2) Registration of a gift deed does not cure the want of delivery of possession-Nazib Ali v. Wajid Ali  44 (Cal.) LJ 490 IC 296. (3) If it is proved by oral evidence that a gift was completed as required by Mohammedan law (Sections 149 and 150), it is immaterial that the donor had also executed a deed of gift, but the deed has not been registered as required by the Registration Act, Section 17(a).
8. One of the contentions raised by the Assistant Controller was that a bequest to a heir is not valid unless the other heirs consent to the bequest after the death of the testator. According to Mohammedan law, no person can bequeath a property by will which is more than one-third of the estate he was holding before his death. A bequest may be revoked either expressly or by implication. , Revocation is express when the testator revokes the bequest in express terms either oral or written.
It is implied, when he does an act from which revocation may be inferred. According to Section 129 of the Mohammedan law, a bequest may be revoked by an act which occasions an addition to the subject of the bequest or an extinction of the proprietary right of the testator. For example (a) a bequest of a piece of land is revoked, if the testator subsequently builds a house upon it; (b) a bequest of a piece of copper is revoked, if the testator subsequently converts it into a vessel; and (c) a bequest of a house is revoked, if the testator sells it or makes a gift of it to another. This principle has been applied in the Pakistani case of Sardar Bibi v. Abdul Latif  Lahore 468. The illustrations are taken from Hedaya, 674. It was pointed out that the said will executed by the testator herein is not a valid will under Mohammedan law in view of the restriction placed in the Mohammedan law on the capacity of a person to bequeath his property by will on the basis of conditions of the validity of a bequest to a heir due to the fact that unless the other heirs consent to the bequest after the death of the testator, the bequest is not valid. It was also alternatively contended that if that document is a will, it was revoked by implication when the said properties like lands and buildings were the subject-matter of gift made later on. A person can write a number of wills but the last will and testament alone will prevail. According to the facts of the present case, after the execution of the will, the deceased is said to have gifted away the properties in question orally, which is permissible under the Mohammedan law. It is well settled that under the Mohammedan law registration under the Registration Act is not necessary for the validity of the gift once it is proved that the gift was completed as required by law as contemplated under Sections 149 and 150 [Section 150(3) in Mulla's Principles of Mahomedan Law, 17th edition, page 143], Provisions of Section 123 of the Transfer of Property Act, 1882, do not apply to gifts under the Mohammedan law and the Patna High Court held in the case of Bibi Maniran v. Mohd. Ishaque  AP 229 that 'Mohammedan law regarding gifts are based on reasonable classification and Section 129 exempting Mohammedans from certain provisions of the Transfer of Property Act is not hit by Article 14 of the Constitution.' In Outlines of Muhammadan Law by Asaf A.A. Fyzee, 4th edition, it was stated : Writing is not essential to the validity of any gift; in Muhammedan law a gift can be made validly by word of mouth (i) 'It is firmly settled that under the Muhammadan law, a gift of immovable properties can be made verbally without recourse to a written document.' Section 129 of the Transfer of Property Act lays down that Chapter VII of the Act, dealing with gifts, does not apply to gifts made under Muhammadan law. Thus, the validity of gifts made by Muslims is to be tested solely by Muhammadan law.(p. 219) Further, in the case of a gift under the Mohammedan law, writing is not essential for the validity of the gift either of immovable or movable property. Considering the law on the subject, the Appellate Controller came to the conclusion that the will as set up in this case is invalid in law. We are also in entire agreement with the order of the Appellate Controller on this point.
9. The other question that now remains to be considered is whether there is a valid oral gift as contemplated under the Mohammedan law. In the present case, it was contended that there was evidence of delivery of possession in the sense that the donor delivered the possession of the land to his wife who was given the above gift and the delivery of possession of the agricultural lands gifted to the minor children was taken by their father and natural guardian that is the donor himself.
In the case of gift of immovable property by husband to wife, Section 153 (Mulla's Principles of Mahomedan Law, 17th edition) states that: The rule laid down in Section 152(3) applies to gifts of immovable property by a wife to the husband and by a husband to the wife, whether the property is used by them for their joint residence, or is let out to tenants. The fact that the husband continues to live in the house or to receive the rents after the date of the gift will not invalidate the gift, the presumption in such a case being that the rents are collected by the husband on behalf of the wife and not on his own account.
In Amina Bibi v. Khatija Bibi  1 (Bom.) HC 157 the gift was from a husband to the wife and the gift consisted of house in which the husband and wife lived together and of a chawl (adjoining the house) which was let out to tenants. Sir M. Sausse, CJ. said : In my opinion, the relation of husband and wife and his legal right to reside with her and to manage her property rebut the inference which in the case of parties standing in a different relation would arise from a continued residence in, the house after the making of HIBA (gift) and in the husband generally receiving the rents of the chawl annexed to that house.
In Ma Mi v. Kallander Ammal  54 IA 23, the gift was by a husband to the wife and mutation of names was duly effected in public records and the wife's name was entered as proprietress. Dealing with this case their Lordships of the Privy Council said : It must, therefore, be taken that mutation was effected by Moideen (husband) himself and in the case of a gift of immovable property by a Mahommedan husband to his wife, once mutation of names has been proved, the natural presumption arising from the relation of husband and wife existing between them is that the husband's subsequent acts with reference to the property were done on his wife's behalf and not on his own.
But no mutation of names is necessary if the deed of gift declares that the husband delivered possession to the wife and the deed is handed over to her and retained by her-Mohammad Sadiq v. Fakhr Jahan  59 IA 1. It was further stated that no mutation of names is necessary to complete transfer of possession in the case of gift-Muhammad Mumtaz v.Zubaida Jan  16 IA 205. Nor is mutation of names a valid substitute for delivery of possession-Mohammad Azim v. Saadat Ali  AO 177.
10. In the case of gift to a minor by the father, Section 155 of the Mohammedan law states that : No transfer of possession is required in the case of a gift by a father to his minor child or by a guardian to his ward. All that is necessary is to establish a bona fide intention to give.-Ameeroonissa v. Abadonissa  15 (Beng.) LR 67; K. Veerankutty v. Pathumakutty  (Mad.) 1004.
In Hedaya, 484; Baillie, 538; Macnaghten, p. 51, Section 9, it was stated that : Where there is on the part of a father or other guardian, a real and bona fide intention to make a gift, the law will be satisfied without change of possession and will presume the subsequent holding of the property to be on behalf of the minor.(Mulia's Principles of Mahomedan Law, page 550).
It was also stated that where delivery and possession of a gift to a minor is effected to a person specified by the donor as guardian (other than father) and the father accepts or acquiesces to such an arrangement, the gift is valid-Azeshabai v. Kathoonbi  AM 462. In the case of Kairum Bi v. Mariam Bi AIR 1960 (Mad.) 447 it was stated that : The rules of Mahomedan law do not require that to make a gift valid the donor must have physical prossession of the property and must hand over that physical possession to the donee. It is enough if he has got legal possession of the property and transfers to the donee such possession as the matter is susceptible of.(p. 448) 11. It was also stated that the question whether possession has been delivered is relevant only when an issue is raised between the donor or those claiming under him on one side and the donee or those claiming under him on the other. A stranger cannot invoke the rule that the gift is bad because there has been no delivery of possession.-Kairum Bi v.Mariam Bi  AM 447, AIR October 1960. The same rule was applied in the Pakistani case of-Fazal Ahmed v. Rakhi  1 WP 1038  P.Lahore 218. In  2 AP LJ (HC) 337 (DB), it was held that oral gift accepted by donee and accompanied by delivery of possession and gift deed executed after ten days but not registered constituted a valid gift.
12. Ace ording to the facts arising in this appeal, in the matter of proof of delivery of possession, out of three witnesses referred to in the affidavit dated 31-3-1972, Md. Naseeruddin was examined on oath by the Assistant Controller who was predecessor to the present Assistant Controller. In the said examination, Md. Naseeruddin affirmed on oath terras of the oral gift. Subsequently, another witness, Mr. Md.
Aliuddin Khan, was examined on oath and he also affirmed the terms of oral gift. On a scrutiny of the above said evidence tendered by the witnesses to the gift, the Appellate Controller was satisfied that the gift made by the testator was duly accepted by the donees in the manner known to Mohammedan law and, therefore, he came to the conclusion that the gift accompanied by delivery of possession is a valid gift.
13. In view of the foregoing discussions, we are also in entire agreement with the view taken by the Appellate Controller with regard to the oral gift of immovable property made under the Mohammedan law.
Accordingly, we hold that the will executed on 1-9-1967 is not a valid will as per Mohammedan law and the oral gift made on 2-4-1970 is a valid gift as contemplated under the Mohammedan law. In that view of the matter, we uphold the order passed by the Appellate Controller in excluding the amount of Rs. 1,85,000 from the estate duty assessment in this case.