COMMISSIONER OF GIFT TAX Vs. BUDUR THIPPAIAH

JUDGEMENT

(1.) THE question referred for our decision under Section 26(6) of the Gift-tax Act by the Income-tax Appellate Tribunal is :

(2.) THE facts necessary for determination of the question are these : THE assessee was a partner of M/s. Budur Thippaiah and Sons, Rayadrug. He had a sum of Rs. 1,22,217.85 to his credit as on 30th April, 1963, in the books of the said firm. Out of that amount, he made several gifts. We are not, in this case, concerned with the gifts made in favour of his sons and daughters. In addition to these gifts, he made a gift of Rs. 5,000 to his mother and claimed exemption under Section 5(1)(vii) of the Gift-tax Act (hereinafter referred to as " the Act") as it was made for the maintenance of his mother, who was dependent upon him. THE Gift-tax Officer rejected the assessee's plea for exemption and subjected that amount to gift-tax. THE assessee then preferred an appeal to the Appellate Assistant Commissioner, who upheld the order of the Gift-tax Officer. On further appeal to the Income-tax Appellate Tribunal, the Tribunal construed Section 5(1)(vii) and held that gifts made to relatives dependent on the donor for maintenance are also exempt in addition to gifts made to dependent relatives at the time of their marriage subject to the exemption limit of Rs. 10,000. In so construing the provision, the Tribunal relied upon the " comma " at the end of the first part of the sentence. According to the Tribunal, that part of the sentence " to any relative dependent upon him for support and maintenance " stands by itself and, therefore, the latter part of the sentence cannot be read in conjuction with the first part of the sentence. It is in that view that the gifts made to any relative dependent upon the donor were held to be exempt from the gift-tax.

(3.) THE case of the revenue is that there are two conditions to be satisfied: (1) THE gift should be to a relative dependent upon the assessee for support and maintenance; and (2) it should be on the occasion of the marriage of such a relative. THE absence of the word "such "is also relied upon by Mr. Subrahmanyam to contend that, if it were the intention of the legislature that this provision could be availed of only at the time of the marriage of the relative, then the word " such " would have been prefixed to the word " relative " instead of the word " the ".