CHATTERJI I Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THIS is a reference under section 26(1) of the Gift -tax Act, 1958. The assessee was a divorcee. He was divorced from his wife, Ritha Devi, under a decree of divorce passed in January, 1969, after a marriage lasting around 19 years. After the divorce, the assessee made a proposal of marriage to one Miss Shanta Sujan. The lady was 25 years younger than the assessee. The assessee had a grown up son by his first marriage. Miss Shanta Sujan, at this time, was about 25 years of age and she was employed as a company secretary earning a monthly salary of Rs. 1,300. In these circumstances, by an indenture dated December 5, 1969, the parties agreed in writing as follows :

(2.) AS per this agreement, the assessee transferred to Miss Shanta Sujan 20,000 shares of Dr. Beck and Co. (India) Ltd. The marriage was solemnised in January, 1970.

(3.) THE Appellate Assistant Commissioner also found that the transfer of these shares to Miss Shanta Sujan, as clearly borne out by the agreement, was in consideration of her promise to marry the assessee. He agreed with the Gift -tax Officer that a promise of marriage cannot constitute consideration in money or money's worth and, therefore, the transfer would amount to a gift within the meaning of that term under the Gift -tax Act of 1958.