COMMISSIONER OF GIFT TAX Vs. P R RAMASWAMY

JUDGEMENT

(1.) THE assessee is assessed in the status of a Hindu undivided family. During the accounting year relevant to the assessment year 1975-76, the assessee set apart a sum of Rs. 80,000 each for his two minor daughters. THE amount set apart, viz., Rs. 1,60,000, as per the entries in the books of account was intended for the education as well as the marriage expenses of his minor daughters. THE Gift-tax Officer allowed exemption of Rs. 40,000 for each of the daughters and brought to tax the balance of the sum of Rs. 80,000. THE Appellate Assistant Commissioner, on appeal, held that the entire amount set apart should be allowed as exemption under Section 5(1)(xii) of the Gift-tax Act. THE Department went on appeal to the Appellate Tribunal and the Tribunal held that the entire amount set apart should be allowed as exempt under Section 5(1)(xii) of the Gift-tax Act. THE Tribunal also observed that the sum of Rs. 80,000 set apart for each daughter is sufficient only for education and the question of marriage provision need not be gone into. THE Tribunal also agreed with the view of the Appellate Assistant Commissioner that the provision for marriage is not a gift on the basis of the decision of the Andhra Pradesh High Court in the case of CGT v. Ch. Chandrasekhara Reddy [1976J 105 ITR 849. THE above order of the Appellate Tribunal is the subject-matter of the reference, on the basis of the direction of this court under Section 26(3) of the Gift-tax Act and the following questions of law have been referred for our consideration :

(2.) WE are of the opinion that the Tribunal considered the social and financial status of the parties, the period necessary for completion of ordinary education according to their standards in life and the expenses required for imparting the education and then came to the conclusion that the sum of Rs. 80,000 each set apart by the assesses for his two minor daughters was required for the purpose of education of the children. WE are of the view, instead of one estimate of Rs. 40,000 each made by the Appellate Assistant Commissioner, the Tribunal arrived at Rs. 80,000 each on the basis of another estimate and, therefore, this court cannot interfere with such an estimate unless it is proved that, the estimate arrived at by the Tribunal was wrong or arbitrary. The Tribunal has taken into account all relevant factors and fixed the amount at Rs. 80,000 for the purpose of education for each of the children. WE are, therefore, of the view that the Tribunal was correct in deciding that the provision of Rs. 1,60,000 shall be construed as a provision for education and the provision was made to meet the reasonable expenses of education for the minor children of the assessee. Hence, it is not necessary for us to consider the question whether the provision for marriage is not a gift. Accordingly, we answer the questions of law referred to us as under :