A RUDRAKODI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following two questions of law have been referred to us for the opinion of this court at the instance of the assessee in respect of the assessment year 1976-77, as directed by this court in judgment dated July 29, 1985, in T. C. P. No. 11 of 1985 :

(2.) THE assessee is an individual who carried on the business of automobile workshop at Salem with a branch workshop known as "Koti Engineering Works". During the assessment year 1976-77, the assessee made certain gifts, viz., machinery valued at Rs. 65,721 to his brother, A. Venkatesan, who was an experienced automobile mechanic and who had been in employment of the assessee since 1960. THE donee had also been receiving salary but he was not in receipt of any other benefits. During the assessment year, viz., 1976-77, the said A. Venkatesan left the assessee's employment and set up an independent business. THE assessee made the gift of machinery worth Rs. 65,721 to A. Venkatesan and claimed exemption to the extent of Rs. 20,000 (rupees twenty thousand only) out of the gift made under the provisions of Section 5(1)(xiii) or alternatively under Section 5(1)(xiv) of the Act.

(3.) IN so far as the second question is concerned, the assessee made a gift of Rs. 15,000 to his daughter, Smt. Chadurvedinayaki. The assessee had performed the marriage of his daughter in September, 1971, and the gift was made on September 29, 1975. The assessee claimed exemption in respect of the marriage gift under Section 5(1)(vii) of the Act. The Gift-tax Officer rejected the claim on the ground that the gift was made long after the marriage and it cannot therefore be said that the gift was made on the occasion of the marriage; The Appellate Assistant Commissioner allowed the assessee's claim on the ground that the assessee had not paid any substantial gift to his daughter at the time of marriage of his daughter, due to his other commitments and, hence, the gift made later was eligible for exemption.