SAVITA DEVI Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THIS is a reference under Section 26(1) of the Gift-tax Act, 1958. The Tribunal has referred the following question of law for answer by this court :

(2.) THE brief facts which are necessary for disposal of this reference are that during the course of the wealth-tax assessment proceedings of the late Shri Damji Tulsidas, it was noticed by the Gift-tax Officer that 80 tolas of gold ornaments in the assessment year 1980-81 were reduced to 50 tolas in the assessment year 1981-82. It was revealed that in the assessment year 1981-82, the deceased assessee had given 15 tolas of gold to his daughter and another 15 tolas to daughter-in-law at the time of their marriages on December 12, 1980, and December 13, 1980, respectively. THE said 30 tolas of gold was assessed to gift-tax by the Gift-tax Officer after allowing exemption of Rs. 10,000 under Section 5(1)(vii) of the Gift-tax Act. THE Appellate Assistant Commissioner, on appeal by the assessee, set aside the order of assessment passed by the Gift-tax Officer holding that it could not be considered as a gift as defined in Section 2(xii) of the Gift-tax Act. Aggrieved by the order of the Appellate Assistant Commissioner, the Department approached the Tribunal in appeal. THE assessee also filed an objection raising a technical objection as to the proper form in which the appeal should have been filed.

(3.) SHRI V. K. Tankha, learned counsel for the Revenue, submitted that as per the definition of "gift" given in Section 2(xii) of the Gift-tax Act, "gift" means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration and in the present case, this transfer by a father to his daughter on her marriage is a transfer without consideration in the course of pious obligation under the Hindu law, therefore, it will not fall under the definition of "gift". However, so far as gift of 15 tolas of gold to the daughter-in-law is concerned, the same will fall within the definition of "gift" as it is a transfer without any moral or customary obligation and the assessee would not be entitled to exemption under Section 5(1)(vii) of the Act as the daughter-in-law is not related and dependant upon her father-in-law for support and maintenance prior to the marriage. Hence, the assessee would not be entitled to exemption of Rs, 10,000 under Section 5(1)(vii) of the Act as far as the gift made in favour of the daughter-in-law is concerned.