Commissioner of Gift-tax Vs. K.B.B. Subudhi - Court Judgment

Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the statutory deposit is made either with the memo of appeal or on such date as may be permitted by the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - ray, learned counsel for the revenue, the basic ingredients required to be satisfied before availing of the exemption did not factually exist and, therefore, the conclusions of the tribunal are not legally tenable. the same, so far as it is relevant, reads as follows :5. exemption in respect of certain gifts, (1) gift-tax shall not be charged under this act in respect of gifts made by any person--(vii) to any relative dependent upon him for support and maintenance, on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative ;7. a bare reading of the provision makes it clear that two conditions are to be satisfied before exemption can be allowed. they have no application per se to cases under section 5(1)(vii). for availing of the exemption, both the conditions as indicated above are to be satisfied.a. pasayat, j.1. these two references are inter-related, and are disposed of by this common judgment.2. accepting the prayer of the revenue for reference, the income-tax appellate tribunal, cuttack bench, cuttack (in short, ' the tribunal'), has referred the following question for the opinion of this court under section 26(1) of the gift-tax act, 1958 (hereinafter referred to as 'the act') :' whether the married daughters-in-law of a karta (an assessee) of a hindu undivided family would be relatives dependent upon him and whether gifts made by their father-in-law immediately after their marriage, are eligible for exemption under section 5(1)(vii) of the gift-tax act, 1958 ?' ,3. the assessment years involved are 1980-81 and 1981-82.4. the background facts as culled out from the statement of case drawn up by the tribunal are that sri k. b. b. subudhi of berhampur in the district of ganjam (hereinafter referred to as ' the assessee') as karta of the hindu undivided family filed two returns of gift on march 31, 1982, for the assessment years 1980-81 and 1981-82 disclosing a total gift of rs. 47,172 and rs. 61,612 and a taxable gift of rs. 32,172 and rs. 46,612, respectively. according to the returns during the assessment year 1980-81, on june 1, 1979, the hindu undivided family gifted gold ornaments and silver ornaments to smt. k. girija kumari, wife of sri k. hariprasad subudhi. besides the basic exemption of rs. 5,000 a sum of rs. 10,000 was claimed as exemption on the ground that the gift was made to the donee who is the eldest daughter-in-law on the occasion of her marriage. similarly, during the assessment year 1981-82, on november 26, 1980, the hindu undivided family gifted gold ornaments and silver ornaments to smt. k. sujata, wife of sri k. ravi prasad subudhi, who is also a daughter-in-law and similar exemption of rs. 10,000 was claimed. the assessing officer did not accept the claim. it was observed that exemption is admissible only in respect ofany relative dependent upon the assessee for support and maintenance, and the gift should be on the occasion of the marriage of the said relative. a finding was recorded that the daughters-in-law were not depending on the assessee on the respective dates of marriage. the observations of the assessing officer were assailed in appeal before the appellate assistant commissioner of income-tax. the said authority was of the view that the exemption is in respect of the marriage of a relative dependent for support and maintenance. it was observed that, in hindu marriages, relatives of both groom and bride make gifts and, therefore, the gifts were made at the time of the marriage. so far as the term ' dependent' is concerned, it was observed that the term would essentially mean that the dependence should be for limited purposes of support and maintenance, and, in the case at hand, the assessee being a hindu undivided family, the daughters-in-law have to depend on it for support and maintenance. therefore, the claims were allowed. the revenue carried the matter in appeals before the tribunal. in deciding the appeals, the tribunal was of the view that the expression ' occasion' did not relate only to the date of marriage. the expression ' dependent' in the absence of a statutory definition was wide enough to include daughters-in-law. reference is made to a circular issued by the central board of direct taxes dated february 27, 1959, in that context. with the aforesaid conclusions, the first appellate order was affirmed and the revenue's appeals were dismissed. a reference to this court was sought for by the revenue which was accepted by the tribunal as indicated above.5. according to mr. ray, learned counsel for the revenue, the basic ingredients required to be satisfied before availing of the exemption did not factually exist and, therefore, the conclusions of the tribunal are not legally tenable. learned counsel for the assessee, on the other hand, supported the conclusions of the first appellate authority and the tribunal.6. for resolution of the dispute, a reference to section 5(1)(vii) is necessary. the same, so far as it is relevant, reads as follows :' 5. exemption in respect of certain gifts, --(1) gift-tax shall not be charged under this act in respect of gifts made by any person-- .... (vii) to any relative dependent upon him for support and maintenance, on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative ;'7. a bare reading of the provision makes it clear that two conditions are to be satisfied before exemption can be allowed. they are : (i) the gift should be to any relative dependent upon the donor (assessee) for support and maintenance ; and (ii) it should be on the occasion of the marriage of the relative. the object of section 5 is to exempt certain kinds of gifts from the levy of gift-tax. the categories of gifts which are exempt from gift-tax are detailed in different clauses of sub-section (1) of section 5. all gifts made to a relative are not exempt in terms of section 5(1)(vii). only a gift to a relative who is dependent upon the donor for support and maintenance is made tax-free if it is made on the occasion of the marriage of the relative. ' gift' is defined in section 2(xii) as ' 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, and includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section '. the expressions ' relative' and 'dependent' are not defined and have to be understood in their ordinary meaning. it has to be noticed that, in sub-section (1) of section 5, clauses (iib), (iic) and (iid) were inserted by finance act, 1982, with effect from april 1, 1983. in explanation (c), ' relative' has been defined to have the same meaning as assigned to it in clause (41) of section 2 of the income-tax act, 1961, for the purposes of clauses (iic) and (iid) only. they have no application per se to cases under section 5(1)(vii). for availing of the exemption, both the conditions as indicated above are to be satisfied. if the dependent be not a relative of the assessee, any aid to such person for his or her marriage would not qualify for exemption. equally, though the person receiving aid be a relative, if he or she is not dependent, the gift to him or her would be chargeable to tax. the words 'support and maintenance' generally go together. they connote the elemental needs of man, namely, food, clothing and lodging. the expression ' dependent' for ' support and maintenance ' in section 5(1)(vii) refers to persons who look to the donor for the necessities of life, namely, food, shelter and raiment; the words ' relative' and ' dependent' have been defined in a broader sense under various acts. the word ' dependent' is used in an unrestricted sense and it is qualified only by the word ' relative'. a question may arise that, if an individual has sufficient income of his own, can he be said to be dependent on any other person it is not uncommon that, at the time of marriages, gifts are made both in cash and in kind. there is a further restriction that the gift should be made on the occasion of marriage. though the word ' occasion' has reference to the time of themarriage, it conveys the idea of association with the event, for example, the marriage event. the expression 'on the occasion of marriage' is not equivalent in meaning to the phrase 'on the same date as'. (see stroud's judicial dictionary, third edition, vol. iii, page 1953). the words ' on the occasion of marriage' do not mean 'on the day of marriage'. they would mean either at or about the time of the marriage with the implication that the coincidence in time was designed and not accidental. (see ideal life assurance co. ltd. v. hirschfield [1943) kb 442 ; [1943] 1 all e. r. 563). accordingly, the gift may precede the marriage, for instance, to purchase dress, furniture, jewels, etc., in preparation for the marriage, or it might be made even after the celebration of the marriage, in order to meet the expenses which have been incurred before or during the marriage but which have not yet been paid or discharged. the word used in the clause is dependent upon 'him'. the word includes the word 'her'. section 13 of the general clause act, 1897, would make the position clear. the words importing the masculine gender shall have to be taken to include females. a question arises whether a daughter-in-law is a dependent at the time the marriage is solemnized. she is certainly not a dependent at that juncture of time. the relationship starts after the marriage is solemnized. before solemnisation of the marriage, there is no relationship stricto sensu. even though the word 'relative' is to be understood in a broader sense, that cannot be said to include a prospective relative. therefore, a gift to the daughter-in-law even subsequent to the marriage cannot be said to be a gift to a relative dependent for support and maintenance on the occasion of marriage. at the time of marriage, there is no question of a prospective daughter-in-law being dependent for support and maintenance. this thin line of distinction is to be made for, otherwise, the purpose of the enactment of section 5(1)(vii) would be rendered illusory. we may give a short illustration. a hindu undivided family has an obligation to maintain and get an unmarried daughter married. that right of the unmarried daughter to be maintained and to get married and the obligation of the family to do so may be inchoate. these rights and obligations do not attach to any specific property. there is an undoubted right under the hindu law of an unmarried daughter to be maintained and to get married and the corresponding obligation of the hindu family to discharge these obligations cannot, therefore, be under any doubt. the provision made for the unmarried daughters towards their maintenance and marriage is not a gift within the meaning of section 2(xii) of the act. a view similar to ours has been taken in cgt v. budur thippaiah : [1976]103itr189(ap) .8. in view of the analysis made, the conclusions of the first appellate authority and the tribunal do not appear to be correct. accordingly, we answer the question referred to us in the negative, in favour of the revenue and against the assessee. no costs.d.m. patnaik, j.9. i agree.