This is appeal objecting to order of AAC who confirmed gift- tax assessment made on appellant in respect of settlement deed executed by him on 28-3-1981 by treating it as gift for asst. year 1981-82, for which previous year ended on 31-3-1981. assessee had filed return for this year admitting 'nil gift'. But in statement accompanying return he admitted value of gift at Rs. 1,10,711 and gift-tax payable at Rs. 6,877. Subsequently he claimed exemption of gift from Gift-tax Act stating that Explanation to section 19 of Transfer of Property Act provided that vested interest would not be defeated by death of transferor. He also relied on decision of Madras High Court in case of CGT v. C. Thiruvenkata Mudaliar [1977] 107 ITR 661, wherein it was held that there was no gift made in circumstances similar to assessee's case. GTO rejected these contentions and relying on decision of Andhra Pradesh High Court in Vadulla Venkata Rao v. CGT [1972] 85 ITR 249 and also on decision of Madras High Court in Ramaswamy Naidu v. M. S. Velappan [1979] II MLJ 88 assessed value of gift at Rs. 1,10,710 and brought same to tax in hands of assessee. 2. AAC to whom assessee appealed, confirmed assessment by holding that in present case interest in property as vested in son, donee, on same day when document was executed, though his right to possess and enjoy property was postponed to later date and hence this would not make document will, since transfer of interest in favour of son by donor amounts to gift taxable under Act. This is being objected to by appellant in present appeal. 3. Shri V. Jagadisan, learned Chartered Accountant for appellant placed before us copy of deed of settlement executed by appellant on 28-3-1981 and submitted that under terms of this document there was no gift in praesenti in favour of son, which would attract liability to gift-tax. He argued that nomenclature of document as deed of settlement was not sufficient of create right in favour of son. He contended that there was no transfer of property in favour of son and no rights were created in favour of settlee under this document and that it was only will. He particularly relied on clauses (1) and (2) of document and pointed out that assessee's son would get property only after lifetime of settlor and till then he was not entitled to any right, title or interest in property. In support of his submissions, learned Chartered Accountant relied on decision of Madras High Court in case of C. Thiruvenkata Mudaliar (supra). He further submitted that departmental authorities have not correctly followed and applied ratio of this decision to facts of present case. He further contended that latest ruling of Madras High Court in case of P. Ayya Naidu v. CGT [1985] 152 ITR 499, which follows decision in C. Thiruvenkata Mudaliar's case (supra) was directly in favour of assessee. He submitted that on authority of these two decisions, document in question should be held to be only will and not deed of settlement giving rise to any gift-tax liability on part of donor, namely appellant herein. learned Chartered Accountant, did not press his objecting to valuation of property. He further stated that Gift-tax Officer had allowed relief due to appellant under section 18A of Gift-tax Act and therefore, he was not also pressing ground relating to this relief claimed by him in grounds of appeal. 4. Shri R. Seshagiri Rao, learned departmental representative, contended that liability to gift-tax arose under provisions of Gift-tax Act in respect of gifts falling under definition of 'a gift' in section 2(xii) of Gift-tax Act. He relied on section 2(xxiv) (b) & (d) where transfer of property is defined and also to provisions of section 5(1) (x) , whereby gifts under will had been specifically exempted from gift-tax. Shri Seshagiri Rao argued that two decisions relied on by GTO in assessment order fully supported Revenue's case. He further argued that decision of Madras High Court in case of C.Thiruvenkata Mudaliar (supra) did not support assessee's contention but really supported Revenue's case. He argued that decision in case of P. Ayya Naidu (supra) also did not help assessee, as there is transfer of property in praesenti under deed of settlement to son as could be seen from reading of clauses (1) and (2) of settlement deed, which was irrevocable and on which stamp duty has been paid as deed of settlement and registered under Registration Act. Shri Seshagiri Rao particularly relied on paras 14 to 17 in case of Ramaswamy Naidu (supra). He, therefore, submitted that departmental authorities have acted rightly in bringing to tax gift made by appellant under deed of settlement and that same should be upheld. 5. We have carefully considered submissions urged on both sides in light of materials placed before us and authorities relied on by them. appellant had executed registered deed of settlement on 28-3-1981 in favour of his son P. Venkata subramanian with view to provide for settlee and out of natural love and affection reserving life interest for himself without any powers of alienation for settlor. We set out below clauses (2) to (4) of settlement deed for facility of reference: "Now this deed of settlement witnesseth: 1. That with view to provide for settlee of second part and out of natural love and affection for him, settlor of first part, subject to life interest in his favour, both hereby settle, transfer and grant and convey by way of settlement, land, building and premises at No. 65/1, Bazullah Road, T. Nagar, Madras-17, more particularly described in Schedule 'B' hereunder, and hereinafter called said property, to be taken absolutely by settlee of second part after lifetime of settlor of first part. 2. settlor of first part shall be entitled to enjoy 'B' Schedule property for his life without any powers of alienation and after his lifetime settlee of second part shall be entitled to absolutely own and enjoy 'B' Schedule mentioned property. 3. settle of second part shall be liable to pay gift-tax, if any, which may be levied in respect of this settlement. 4. settlor of first part hereby declares that this settlement is irrevocable." 6. In our view this document has to be construed only as settlement deed and not as will, as it creates life interest, in favour of settlor and further conveys vested remainder in favour of settlee on date of execution of document itself though possession and enjoyment of settled property document itself though possession and enjoyment of settled property to settlee is postponed after lifetime of settlor who had no power of alienation under document. Further this document has been stamped as deed of settlement by paying stamp duty of Rs. 3,770 on value of property settled at Rs. 1,45,000 as stated in clause (5) of deed and it is also registered. So we are unable to agree with contentions urged on behalf of appellant that this document should be construed only as will and not as gift, merely because settlee is entitled to take property only after lifetime of settlor in whose favour there is life interest only without any powers of alienation. 7. In case of C. Thiruvenkata Mudaliar (supra) their Lordships of Madras High Court have held as follows at pages 668 and 669 of reports: "Normally speaking, every document has to be construed with reference to language it contained and, therefore, decision construing one document cannot be authority for construing another document except principles or guidelines. only general principle or guideline that can be said to have been laid down in this behalf is that document should be read as whole and it is substance of document that matters and not nomenclature, and what determines charter of document is nature of disposition contained therein as to whether it was intended to take effect in praesenti or it was intended to take effect on death of owner of properties." 8. decision of Madras High Court in case of Ramaswamy Naidu (supra) at page 92 lays down important tests to be applied in such cases, which are quoted below: "14. While interpreting instrument, particularly to find out whether it is of testamentary character, which will take effect after lifetime of executant or whether it is instrument creating vested interest in praesenti in favour of person, question has to be examined with care, after looking into sub- stance of document, treatment of subject by settlor, intention appearing both expressly in instrument and by necessary implication, and avowed intention of settlor not to revoke settlement at any time, making it also public by registering document, under appropriate law of country. In Sellayya Pillai v. Devaraya Pillai, Raghavan J. after referring to series of decisions to wit: Thakur Ishri Singh v. Thakur Basdeo Singh, Reference by Collector and Superintendent of Stamps, Bombay, Rajammal v. Authiammal; Venkatachalam v. Govindasami; Gangaraju v. Somanna; Md. Abdul Ghani v. Fakhir Johan Begum; Ignatio Britt. v. Rego and Veerabadrayya v. Seethamma, summarised acceptable tests laid down in those cases, to determine whether document is will or settlement. Some of important tests laid down therein appear to be - (i) nomenclature used by settlor in styling document; (ii) express dispositive words used which tough upon time when vested interest is created; (iii) reservation of power of revocation in instrument; (iv) effect of reservation of life estate in favour of executant under instrument; (v) registration of document under appropriate law. 15. We may also add that it is substance of instrument and generous impluses which prompted person to execute document, and not form adopted, which should determine real nature of instrument. 16. It is convenient at this stage to consider question whether interdict created on right of first plaintiff to alienate property is by itself sufficient to make Exhibit A-1 testamentary instrument. Section 19 of Transfer of Property Act, reads as follows: 'Sec. 19. Vested interest: Where, on transfer of property, interest therein is created in favour of person without specifying time when it is to take effect or in terms specifying that it is to take effect forthwith or on happening of event which must happen, such interest is vested, unless contrary intention appears from terms of transfer.' 17. vested interest is not defeated by death of transferee before he obtained possession. 'Explanation: intention that interest shall not be vested is not to be inferred merely from provision whereby enjoyment hereof is postponed or whereby prior interest in same property is given or reserved to some other person, or whereby income arising from property is directed to be accumulated until time of enjoyment arrived, or from provisions that if particular even shall happen interest shall pass to another person.'" At page 93 of reports in paras 18 and 19, their Lordships have held as follows: "..... Explanation to sec. 19 of Transfer of Property Act providing that vested interest is not defeated by death of transferee before he obtains possession, makes legislative intent clear that such vested interest, merely for reason that it becomes vested after lifetime of settlor, would not make it settlement not being in praesenti. We are therefore unable to agree with content that interest that Velappan, first plaintiff, obtained under instrument is not vested one and that it could be defeated because it is postponed till after lifetime of Meenakshi Ammal. 19. In instant case document itself is styled as settlement deed. It has been registered. right to enjoy properties and secure benefits and temple honours as trustee under it have become fail accompli even during lifetime of Meenakshi Ammal ...." Finally, in para 21 at page 94 of reports, their Lordships held as follows: "21. One other factor which has great impact upon facts and circumstances of this case is that instrument is expressly made not revocable. accepted definition of will is that it is instrument whereunder person makes disposition of his property to take effect after his decease and which is, in its own nature, ambulatory and revocable during his life. So far as other condition which is also thought of while interpreting instrument for purpose of deciding whether it is will or settlement namely, whether it was intended not to take effect until after death of donor, we have already referred to sec. 19 of Transfer of Property Act. Though disposition may be postponed till lifetime of settlor and though prima facie it may appear that disposition consummates only after his death, yet, such postponement not being illegal, if in given instrument such as Exhibit A-1, there is present disposition and vesting of right in praesenti and if such conclusion can be arrived at reasonably by reading instrument as whole, then mere ambulation of interest during lifetime of settlor would not make it testamentary one. Above all, instrument is registered one. Taking all circumstances into consideration, Sethuraman, J. was right when he said that Exhibit A-1 was settlement and not will. Undoubtedly Meenakshi Ammal desired that document shall be effective from date of instrument. She was aware of distinction between will and settlement. She caused instrument to be registered. She would specifically impose restriction on herself that she had no power of revocation of that instrument and, as we have seen already, even during lifetime of Meenakshi Ammal, Velappan, first plaintiff had secured benefit under instrument. For all these reasons we uphold judgment of learned Judge in so far as it relates to relief of declaration sought by first plaintiff as owner of properties." 9. In our view ratio of these two decisions of Madras High Court are directly applicable to facts of present case and applying tests laid down in these two decisions, we come to conclusion that document in question is irrevocable deed of settlement, which creates vested remainder in prasesenti in favour of son of appellant, though there is postponement of enjoyment of rights by son after lifetime of settlor. 10. In decision of Madras High Court in case of P. Ayya Naidu (supra) facts were entirely different as could be seen from recitals of document as well as head note. In fact, at page 503 of reports their Lordships have held as follows on reading of recitals in said document: "Even casual reading of above recitals will clearly show that there are absolutely no words to indicate present vesting of any interest in favour of daughters and grandchildren of vested remainder after life interest of assessee and his wife. On other hand, following specific recitals will clearly indicate that assessee intended that vested remainder granted in favour of daughters and grandchildren should take effect only after lifetime of his wife and himself:" Again at page 504 their Lordships have held as follows: "Thus, there is specific recital that vesting of remainder interest should take effect after lifetime of spouse and on next day of death of settler. Hence, it is futile on part of Revenue to contend that document contained recitals expressing intention of donor that vested remainder should take effect from date of document. next contention of Revenue that because donor has undertaken not to change or revoke document, document amounts to gift deed cannot be correct in Jaw, when it is found that transfer of interest is directed to take effect only after lifetime of executant, as executant has not deprived himself of his interest in property during interval, since it is open to him to dispose of any property before vesting date. It is because of such situation, document can be treated only as will and not as gift deed. If document is gift deed, there should be present vesting of interest though entering into possession and enjoyment of property may be postponded to later date." These passage do not support contentions of assessee but contentions of Revenue in present case in light of recitals contained in deed of settlement executed by appellant which we have quoted in para 5 (supra). 11. Respectfully following two decisions of Madras High Court quoted above, we confirm gift-tax assessment made on appellant and dismiss appeal. *** A. PADMANABHAN v. GIFT TAX OFFICER