1. This appeal by the Revenue is for the asst. yr, 1987-88, and is directed against the order of the Dy. CGT(A), cancelling the gift-tax assessment made by the AO holding that the assessee in her capacity as mother has only discharged her legal obligation towards her daughter.
The case of the Revenue is that the first appellate authority should have noted that the transaction is exigible to tax under the GT Act since no consideration was passed.
2. The assessee filed the return of gift for the asst, yr. 1987-88 in response to the notice under Section 16(1) showing the taxable gift at 'Nil', The AO noted that the assessee, mother of the recipient of the gift, gifted 75 sovereigns of jewellery to her daughter at the time of marriage on 22nd Aug., 1986. It was the case of the assessee that by making the above gift, she has discharged a duty cast on a Hindu female to maintain her daughter and the gift was an item of expenditure incidental to marriage. The assessee relied on the decision of the Madras Bench of the Tribunal in Smt V. Padmavathy Ammal v. GTO. The AO did not agree with the contention of the assessee and brought value of 76 sovereigns of gold jewellery to gift-tax, Aggrieved by the order of the AO, the assessee went in appeal before the learned first appellate authority, who accepted the contention of the assessee by deciding the issue in favour of the assessee on the following lines : "Sri N.N. Ramachandran, C.A. Palghat, appeared for the appellant and he was heard. It was submitted that the appellant had given gold jewellery to her daughter at the time of her marriage in the course of discharging her legal obligation as parent to maintain her unmarried daughter and to get her married in a befitting manner. It was also submitted that a Hindu is under legal obligation to maintain his/her unmarried daughter and this liability existed not only to a male Hindu member but also to a female Hindu and that, therefore, the appellant in her capacity as mother has only discharged her legal obligation towards her daughter. Reliance was placed on the following decisions : The appellant also drew my attention to the CBDT Circular No. 419, dt. 1st June, 1985, on the subject.
5. On a consideration of the arguments advanced and the decisions cited, I am satisfied that what the appellant did was only to discharge her legal obligation towards her daughter on the occasion of the latter's marriage and that the making available of gold jewellery to the appellant's daughter did not constitute a gift liable to gift-tax. In the circumstances, the order of the GTO is hereby cancelled and the appeal is allowed." Aggrieved by the above order, the Revenue is in appeal before the Tribunal.
3. The learned Departmental Representative relying on the decision of the Kerala High Court in the case of COT v. Smt B. Indira Devi, submitted that since the gift was not made by the assessee to discharge her legal obligation of maintaining the daughter, the same is a gift made voluntarily within the meaning of Section 2(xii) of the GT Act, 1958. The learned representative of the assessee, on the other hand, submitted that this is a case where a Hindu mother gifted a few items of gold jewellery to her daughter on the eve of her marriage, as a part of the marriage expenses, and the question is whether the same constitutes a gift taxable under the provisions of the GT Act. The assessee's learned representative submitted that under Section 23 of the Hindu Adoptions and Maintenance Act, 1956, the obligation of the parents to maintain the unmarried daughter also include the duty to get her married off and meet the consequential expenses of the marriage if she herself is unable to maintain herself and to meet the expenses.
This aspect, according to the learned representative of the assessee, is covered by the provision contained in Section 3(b) of the Hindu Adoptions and Maintenance Act, 1966, which also defines the scope of the expression 'maintenance', Sub-section b(ii) envisages reasonable expenses of and incident to her marriage". Therefore, the assessee's learned representative submitted that irrespective of the fact whether it is father or mother, their duty to protect and maintain the daughter, unmarried, whether minor or major, also includes their obligation to perform the marriage of the daughter, and to meet the consequential expenses For this proposition, the assessee's learned representative relied on the decision of the Andhra Pradesh High Court in AIR 1980 AP 139. The learned representative of the assessee also brought to my notice the decision of the Calcutta High Court in the case of CGT v. Basant Kumar Aditya Vikram Birla (1982) 137 ITR 72 (Cal) and distinguished the decision of the Kerala High Court in the case of CGT v. Smt B. Indira Dew (supra). He contended that in the case before the Hon'ble Kerala High Court, it was held that there was no legal obligation on the part of the Hindu parents to maintain their married daughter. The learned representative submitted that the only point that is to be considered is whether the present of 75 sovereigns of gold jewellery is reasonable or not in the facts of the case. The assessee's representative further submitted that the assessee is a wealth-tax assessee and she possessed 150 sovereigns of gold before the marriage of her daughter. She gave 75 sovereigns of jewellery to her only daughter at the time of latter's marriage. Therefore, the gift of 75 sovereigns of gold jewellery has to be considered very reasonable and fair. The learned representative of the assessee accordingly pleaded that the appeal preferred by the Revenue deserves to be dismissed.
4. I have heard rival submissions and gone through the orders of the Revenue authorities and the decisions relied on by both parties. I have no reason to interfere with the order of the learned Dy. CGT(A).
Section 20(3) of the Hindu Adoption and Maintenance Act, 1956, reads as under : "20(3) The obligation of a person to maintain his or her aged or infirm parent or a daughter who is unmarried extends insofar as the parent or the unmarried daughter, as the case may be, is unable to maintain himself or herself out of his or her own earnings or other property." From a reading of the above section it is clear that a duty is cast upon the parents to maintain their unmarried daughter who is unable to maintain herself. Courts have taken the view that the obligation to maintain an unmarried daughter includes the obligation to provide for her marriage expenses in view of the definition of the term "maintenance" in Section 3(b)(i) of the above Act. Section 3(b) defines 'maintenance'. Maintenance includes- (i) in all cases, provision for food, clothing, residence, education and medical attendance and treatment, (ii) in the case of an unmarried daughter, also the reasonable expenses, of and incident to her marriage.
In the case of Devchand C. Shah v. Commr. of Expenditure Tax (1970) 78 ITR 534 (Mys), the Hon'ble Mysore High Court held : "The expenses for the marriage of a daughter of a Hindu family are a legitimate charge on the family estate. At the same time a Hindu father is also bound to meet the expenses of his daughter's marriage. The responsibility of the father has been statutorily recognised by Section 20 of the Hindu Adoption and Maintenance Act, 1956, and the Act has for the first time declared that the obligation to maintain rests also on the mother. Both the undivided family as well as the parents of the bride are thus under a legal obligation to meet the legitimate expenses of her marriage." In the case of Bhavaneswari v. Special Tahsidar AIR 1980 AP 139, the Hon'ble Andhra Pradesh High Court held that the transfer of a land in favour of a daughter by a Hindu by way of marriage provision is not a gift falling within the mischief of Section 122 of the Transfer of Property Act and as such the document evidencing the transfer does not require any registration.
5. In the context of the above decisions, what is to be seen in whether the gift of cash or jewellery by either of the parents or both forms part of a reasonable or incidental expenditure of the marriage of the daughter. Section 3(a) of the Hindu Maintenance and Adoption Act, 1956, defines the expressions "customs" and "usage" as under : "3. Definitions.--In this Act, unless the context otherwise requires : (a) the expressions "customs" and "usage" signify any rule which, having been continuously and uniformly observed for a long time, has obtained the force of law among Hindus in any local area, tribe, community, group or family : Provided that the rule is certain and not unreasonable or opposed to public policy; and............." The first condition that is to be satisfied is that the "customs" or "usage" should not be unreasonable or opposed to public policy and secondly, it should be a "custom" or "usage" that is continuously and uniformly observed for a long time and thereby gains a force of law among the Hindu community.
6. There is no case for the Revenue that the gift of 75 sovereigns of gold jewellery by the assessee was in terms of any demand from the bridegroom's side or it was against the customary law of the society.
It is well-known and judicially recognised by the decisions mentioned (supra) that any gift made in cash or in kind forms part of the maintenance in view of the language of Section 20(3) r/w Section 3(b)(ii) of the Hindu Maintenance and Adoption Act, 1956. I find no reason to disturb the order of the first appellate authority, on this point.