K.R. Dixit, Judicial Member - (1.) THIS appeal is regarding the transfer of certain shares by the assessee to the daughter of the karta claimed to be on the occasion of her marriage. It raises two issues, whether the transfer can be regarded as a gift under the Gift-tax Act and in the alternative whether exemption under Section 5(1)(vii) of that Act would be available to the assessee.
(2.) Briefly stated, the karta of the assessee HUF transferred shares worth Rs. 37,600 to his daughter on 27-11-1982 and claimed it as having been made on the occasion of her marriage which took place more than six months before, i.e., 5-5-1982. Because of this time gap the GTO rejected the assessee's claim of exemption under Section 5(1)(vii) on the ground that the gift was not made on the occasion of the marriage. Before the Dy. Commissioner (Appeals) the assessee took the ground that the GTO had erred in holding that the said transfer was a taxable gift and in the alternative that he erred in rejecting the above claim of the assessee for exemption. The Dy. Commissioner confirmed the GTO's order rejecting the assessee's claim for exemption relying on the decision in CGT v. M.S. Rao [1976] 102 ITR 308 (Pat.). However, he did not decide the first ground that the GTO had erred in regarding the transfer as a taxable gift. Before the Tribunal, the assessee has taken the ground that the Dy. Commissioner had erred in not deciding the aforesaid first ground and also in the alternative in confirming the GTO's order rejecting the claim to the said exemption. At the time of hearing before us submissions were made on behalf of the assessee regarding both the above claims (a) that the transfer is not a taxable gift and (b) in the alternative that it is exempt under Section 5(1)(vii) of the Act. Since the Dy. Commissioner has not decided the first ground, it will be open to us to send back the matter to the Dy. Commissioner. However, since considerable time and effort have been expended by both the sides before us on the first point and since no new facts have to be ascertained we shall decide that first ground also.
(3.) REGARDING the first point that the transfer is not taxable gift the assessee's representative Invited the Tribunal's attention to the definition of 'gift' under Section 2(xii) the material part of which is as follows: -- 'Gift' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth. He submitted that since it was the duty of a HUF to provide for the marriage expenses of the daughter of the karta the transfer could not be said to have been made voluntarily and so it was not a gift relying upon the decision of the Calcutta High Court in CGT v. Basant Kumar Aditya VikramBirla [1982] 137 ITR 72 9 Taxman 206 and also on the Board's Circular No. 419 dated 1-6-1985 published in 155 ITR (Stat.) page 7 which states that "the Department has accepted in principle, the judgment of the High Court". He also relied on the decision of the Andhra Pradesh High Court in CGT v. Bandlamudi Subbaiah [1980] 123 ITR 509 to the same effect. He submitted that the gift was given on the occasion of marriage although there was a time gap of six months between the marriage and the gift and explained that this time gap had occurred because the mother-in-law of the daughter had died and so the gift could not be made at the time of the marriage adding that the gift was made on the auspicious day of Diwali. He distinguished the aforesaid decision of the Patna High Court in M.S. Rao's case (supra) on the ground that in that case there was a very big time gap of one year and four months between the marriage and the gift deed and that the gift was made by the same document by which another gift was made to the assessee's son.;