COMMISSIONER OF GIFT TAX Vs. M C GEORGE

JUDGEMENT

(1.) The assessee is a Christian hailing from the erstwhile Travancore area of the State of Kerala. The assessee, before the States Reorganisation Act was extended, was governed by the Travancore Christian Succession Act. The assessee married away his daughter on 9.9.1985. While marrying away his daughter, the assessee gifted to his daughter a sum of Rs. 85,001/-. The assessee did not file any return under the Gift Tax Act for the assessment year 1986-87 in respect of the gift made to his daughter at the time of her marriage. A notice under S.16(1) of the Gift Tax Act was hence issued to the assessee. In response to that notice, the assessee filed a nil return. At the hearing, the assessee explained that the payment of Rs. 85,001/- to his daughter at the time of marriage did not constitute a gift since he was under an obligation to maintain his daughter. According to the assessee, his obligation to maintain his daughter included the obligation of getting his daughter married in an appropriate manner and he was only discharging his obligation as a father when he gifted the sum of Rs. 85,001/- to the daughter at the time of her marriage, according to the assessee, therefore, it was not a gift as defined under the Gift Tax Act, 1958 and it was really a transfer of money by him to his daughter in consideration of the discharge of his obligation as a Christian father. The assessing officer rejected the contention of the assessee. The officer stated that a Christian father is obliged to bring up his daughter properly and marry her away in a decent manner. But a lumpsum payment made to the daughter at the time of her marriage will definitely constitute gift which can be subjected to tax under the Gift Tax Act. When a father married away his daughter, it was not necessary that he should also make a gift of the lumpsum. Thus the gift tax officer completed the assessment after providing for exemptions under S.5 of the Act and determining that the taxable gift was Rs. 75,000/-. The assessee went up in appeal before the Deputy Commissioner of Income Tax (Appeals). The Deputy Commissioner of Income Tax held that the decision of the Andhra Pradesh High Court in Commissioner of Gift Tax v. Bandi Subba Rao, 167 ITR 66 which related to a gift made by a Hindu father to his daughter, could not be applied to a case of a gift by a Christian father to his daughter at the time of her marriage and that the gift was exigible to tax under the Gift Tax Act subject to deductions provided for under S.5(1)(vii) and 5(2) of the Act. Thus the appeal was dismissed. The assessee went up in appeal before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal upheld the plea of the assessee that a Christian father was bound to maintain his daughter and the maintenance included getting the daughter married to a suitable person. After referring to the decision of the Andhra Pradesh High Court relied on by the assessee, the Tribunal referred to a decision of this Court in Scariah Varghese v. Marykutty, 1991 (2) KLT 71 and the decision of the Travancore Cochin High Court in Cheriya Varkey v. Ouseph Thresia, AIR 1955 TC 255 and took the view that even a Christian father was under a legal obligation to maintain his daughter and the discharge of such an obligation at the time of the marriage of the father did not amount to making a gift exigible to gift tax. According to the Tribunal there was no distinction between a Hindu father and a Christian father in this respect. Thus the order of assessment was set aside by the Tribunal. At the instance of the Revenue, the following question has been referred to us under S.26(1) of the Gift Tax Act: -

(2.) After the Indian Succession Act was extended to the united State of Travancore Cochin, the assessee in this case is governed by the Indian Succession Act. Under the Travancore Christian Succession Act, a daughter was entitled to be paid Sthreedhanam at the time of her marriage and if she had not been paid Sthreedhanam, she was entitled to inherit a share in the property of the father, limited to the value of Rs. 5,000/-. But under the Indian Succession Act, she gets only a right of inherit the properties which her father dies possessed of. There is no case for the assessee here that the amount of Rs. 85,001/- transferred to his daughter was as Sthreedhanam as understood by the members of his community, nor has the assessee a case that the amount was expenses incurred for the marriage of his daughter. He has also no case that it was a payment in lieu of maintenance due to his daughter before her marriage. This was obviously an amount given by the assessee to his daughter in addition to the amount spent by him on the marriage of the daughter. In this situation, the question is whether the payment of this amount to the daughter could not be treated as a gift as defined in the Act, the consideration for which is only love and affection.

(3.) In Chacko Daniel v. Daniel Joshua, AIR 1953 Travancore - Cochin 61, it was held by the Travancore Cochin High Court that there was no obligation on the part of a Christian father to maintain his minor child which could be enforced through a court of law. In Cheriya Varkey v. Ouseph Thresia, AIR 1955 Travancore Cochin 255, the Travancore Cochin High Court held that under the principles of justice, equity and good conscience, the obligation of a Christian husband to maintain his wife was not a mere moral obligation but is a legal obligation which could be enforced in law, although not by direct action by the wife. Therefore, according to the personal law of the Christians, in the Travancore - Cochin State, the husband has a legal obligation to maintain his wife. The wife is entitled to claim separate maintenance only if there is justifiable cause for her refusal to live with her husband. This decision shows that on the marriage of the Christian lady, the obligation to maintain her passes to the husband even if we assume that until then the Christian father had the legal obligation to maintain his daughter.