| SooperKanoon Citation | sooperkanoon.com/65339 |
| Court | Income Tax Appellate Tribunal ITAT Hyderabad |
| Decided On | Mar-24-1992 |
| Judge | N Krishnamurthy, C Singh |
| Reported in | (1992)42ITD90(Hyd.) |
| Appellant | Gift-tax Officer |
| Respondent | Smt. Meka Chandramathi |
2. During the period relevant to the assessment year 1986-87 the assessee transferred 3.52 acres of land to her daughter at the time of her marriage. In the gift-tax proceedings the assessee claimed that this land was transferred in pursuance of the obligation cast on her as the mother to maintain her daughter which includes incurring of reasonable expenses in connection with the daughter's marriage and as such the value of the transferred property cannot be subjected to gift-tax. However, the Assessing Officer rejected this claim of the assessee, treated the transfer of the land made by the assessee as without consideration and consequently a gift, and, therefore, computed the value of the transferred land at Rs. 92,1 00 and after allowing deduction under Section 5(l)(vii) of the Gift-tax Act, subjected the balance amount to gift-tax.
3. Aggrieved by the aforementioned assessment order the assessee preferred an appeal to the Deputy Commissioner (Appeals). Before the Deputy Commissioner (Appeals) it was submitted on behalf of the assessee that it was the imperative duty and moral obligation of the mother to maintain and marry her unmarried daughter and therefore in pursuance of this obligation the mother settled 3.52 acres of land on the daughter towards her marriage expenses and hence such a transaction cannot be considered as a gift, since there is consideration in the form of discharging of a legal obligation of the mother. The Deputy Commissioner (Appeals), following the decision of the Andhra Pradesh High Court in the case of CGT v. Ch. Chandrasekhara Reddy [1976] 105 ITR 849 and also the decision of the same High Court in the case of CGT v. Bandi Subba Rao [1987] 167 ITR 66, had reached the conclusion that the assessee was under legal as well as a moral obligation to give her daughter in marriage to a suitable husband by incurring reasonable expenses therefor and, therefore, the transfer of 3.52 acres of land to the daughter in connection with her marriage expenses could not be treated as a gift and consequently the value of the same would not be exigible to gift-tax.
4. In the present appeal Smt. Mythiii Rani, the learned departmental representative submitted that the Deputy Commissioner (Appeals) has erred in allowing the assessce's appeal ignoring the fact that the so-called legal or moral obligation to perform the daughter's marriage under Hindu Law, is primarily cast on the father and not on the mother.
In other words her contention is that the assessee mother is not under a legal obligation to incur the marriage expenses of her daughter and and if she had chosen to do so, it was a voluntary act devoid of any consideration, muchless adequate consideration and consequently the transfer of 3.52 acres of land by the assessee to her daughter would amount to a gift within the meaning of Section 2(xii) of the Gift-tax Act and its value is, therefore, exigible to gift-tax. None appeared for the assessee.
5. We have considered the submissions of the learned departmental representative and perused the records. Section 2(xii) of the Gift-tax Act defines a gift to mean the transfer by one person to another of any existing or immovable property made voluntarily and without consideration in money or money's worth. From this definition it is seen that absence of consideration is an essential attribute of a gift.
In other words, if consideration for the transfer is there, then such a transfer does not amount to a gift.
6. In the case of Smt. Kamla Devi v. Bachulal Gupta AIR 1957 SC 434, the Supreme Court has inter alia laid down as under :-- On an examination of the decisions referred to above, the following principles clearly emerge: (1) It is the imperative religious duty and a moral obligation of a father, mother or other guardian to give a girl in marriage to a suitable husband; it is a duty which must be fulfilled to prevent degradation, and direct spiritual benefit is conferred upon the father by such a marriage....
(4) Gifts by a widow of landed property to her daughter or son-in-law on the occasion of the marriage or any ceremonies connected with the marriage, are well recognised in Hindu law.
(5) If a promise is made of such a gift for or at the time of the marriage that promise may be fulfilled afterwards and it is not essential to make a gift at the time of the marriage but it may be made afterwards in fulfilment of the promise.
(6) Some decisions go to the length of holding that there is a moral or religious obligation of giving a portion of the joint family property for the benefit of the daughter and the son-in-law, and a gift made long after the marriage may be supported upon the ground that the gift when made fulfills that moral or religious obligation.
From the above decision of the Supreme Court it is abundantly clear that it is the imperative duty and moral obligation of a father, mother or even a guardian to give a girl in marriage to a suitable husband and that a gift made either by father or mother on the occasion of such a marriage would not amount to a gift as contemplated under Section 2(xii) of the Gift-tax Act, because the discharge of a moral or a religious obligation, namely performing the daughter's marriage by incurring reasonable expenses, would constitute the consideration for the transfer.
7. What was a moral or a religious obligation of parents to perform the marriage of their daughter by incurring reasonable expenses therefor under Hindu law was elevated to a statutory obligation under the Hindu Adoptions and Maintenance Act, 1956 (hereinafter called the Maintenance Act). Section 20 of the Maintenance Act mandates that a person is under a legal obligation to maintain his wife, minor sons, unmarried daughters and old parents. The expression 'maintenance' has been defined in Section 3(b) of the Maintenance Act to mean and include in the case of an unmarried daughter the reasonable expenses incidental to her marriage. While considering the ambit and scope of Section 3(b) of the Maintenance Act the Andhra Pradesh High Court in the case of Ch.
Chandrasekhara Reddy (supra) has inter alia laid down that a Hindu father has got a legal as well as a moral obligation to give his daughter in marriage to a suitable husband and for this purpose he is entitled to set apart a portion of the family properties. It is further observed that in enacting Section 3(b)(ii) of the Hindu Adoptions and Maintenance Act the legislature did nothing more than codifying the well settled principles of Hindu law and provided for payment of reasonable expenses incidental to marriage and hence both under the general Hindu law and the Maintenance Act the father is under an obligation to give some property on the occasion of his daughter's marriage and if the conveyance is made in discharge of this obligation in the shape of reasonable expenses incidental to the marriage, it can be said to be a transfer for consideration and as such such a transfer will not be a gift liable to gift-tax under the Gift-tax Act. The Madras High Court in the case of CGT v. M. Radhakrishna Gade Rao [1983] 143 ITR 260 has observed as under: These general principles of Hindu law laid down by Courts have been applied to determine questions arising under the G.T. Act. Courts have taken the view that the definition of gift under Section 2{xii) of the G.T. Act as a transfer made voluntarily and without consideration in money or money's worth can hardly fit in with the so-called gifts or settlements of ancestral or joint family property in favour of unmarried daughters in Hindu families. In one sense a gift or settlement of property to the unmarried daughters may be said to be in discharge of a legal obligation. As we have earlier seen, it is the right of an unmarried daughter to have a reasonable portion of income or corpus of the joint family property utilised for meeting her marriage expenses. In this sense, a settlement in her favour of joint family property as a marriage provision can hardly be regarded as a gift since such a provision is compulsive under the Hindu law and by no means voluntary in the proper sense of the term. Again, since the karta, when he settles the property on the unmarried daughter, by the same token, discharges the obligation of the joint family estate to meet the expenses of marriage, the transaction cannot be regarded as one without consideration in money or money's worth. Looked at from any angle, settlements of this kind cannot be brought within the mischief of the G.T. Act.
8. Again the Andhra Pradesh High Court in the case of CGT v. Bandlamudi Subbaiah [1980] 123 ITR 509, while dealing with a similar question, has inter alia observed as under:-- It is settled law that an unmarried daughter in a joint Hindu family has a right to be maintained and get married and the obligation of the joint Hindu family in this behalf remains inchoate in the sense that these rights and obligations do not attach to specific property. When the members of the Hindu joint family allot certain properties to the unmarried daughters of the family at the time of partition to discharge the binding obligation on them to maintain them and to get them married, it cannot be said that the properties were given to the unmarried daughters voluntarily and without consideration in money or money's worth. Provision made for the unmarried daughters towards their maintenance and marriage is not a gift within the meaning of Section 2{xii) of the G.T. Act. Nor could it be deemed to be a gift under any of the clauses of Section 4.
9. While reiterating the above position the Andhra Pradesh High Court in its later decision in the case of CGT v. Bandi Subba Rao's case (supra) has laid down the following principle:-- Giving property to an unmarried daughter as incident to maintenance is a legal obligation cast on the father or any person receiving the property of the father except a purchaser for valuable consideration without notice of the said right of the daughter. Equally, giving a reasonable property at the time of the marriage or subsequently in the discharge of that legal obligation, is not, thereby, a voluntary gift made by the father but is in compliance with his legal obligation. Any instrument executed by the father in discharge of that legal obligation or any settlement of a reasonable portion of the property in fulfilment of the existing legal claims of a married or unmarried daughter is not without consideration of money or money's worth as contemplated under the Act nor can it be said to be a voluntary one. Equally, the promise made at the time of the marriage of a daughter to give a reasonable portion of the property or a settlement or a gift made long after the marriage is in fulfilment of the pre-existing legal obligation of the father under the general Hindu law. Therefore it ceases to be a voluntary act nor is it to be labelled as without consideration but is one in the discharge of a pre-existing legal obligation. Therefore, it is neither an alienation nor a transfer, attracting Section 2(xii) of the Gift-tax Act, but is a family settlement. There is no taxable gift made to a married daughter. Thereby the assessee is not obliged to pay gift-tax.
10. From the aforementioned decisions it is seen that a Hindu father is under legal obligation to maintain his unmarried daughter under the provisions of Hindu Adoptions and Maintenance Act. The expression 'maintenance' occurring in Section 20 of the Maintenance Act includes not only the daily necessities of providing food and clothing to the dependent daughter but also performing the daughter's marriage by incurring reasonable expenses incidental thereto in the form of presents on the occasion of the marriage. It is immaterial whether the property from which these expenses are incurred is the joint family property or the self acquired property of the father or the mother. In the absence of father the obligation to maintain the unmarried daughter falls on the mother. That it is so, is vividly brought out by the observation made by the Supreme Court in the case of Smt. Kamla Devi (supra) wherein it was explicitly laid down that it is the imperative duty and moral obligation of a father, mother or even a guardian to give a girl in marriage to a suitable husband and that a gift made by either father or mother on the occasion of such a marriage would not be a gift. In other words whatever is stated of the father in the aforementioned decisions would mutatis mutandis be applicable in the case of the mother in case the father is not there or even if he is there but he has no sufficient means to maintain his daughter. Thus the legal obligation of the mother to maintain her unmarried daughter flows both from the principles of Hindu law as well as the provisions contained in the Hindu Adoptions and Maintenance Act. As already stated maintenance includes the incurring of reasonable expenses in connection with the marriage of the daughter. Thus in pursuance of this legal obligation, if the mother settles or presents a reasonable portion of the property on the occasion of her daughter's marriage, such a transfer cannot be said to be without consideration. In other words the discharge of the legal obligation cast on the mother under Section 20 of the Hindu Adoptions and Maintenance Act, namely that she should perform the daughter's marriage by incurring reasonable expenses therefor would constitute an adequate consideration for the transfer of 3.52 acres of land made by her to her daughter on the occasion of the latter's marriage. Thus the essential attribute, namely the absence of consideration for the transfer of 3.52 acres of land by the assessee to her daughter is absent in this case and consequently the question of treating the transfer of 3.52 acres of land by the assessee to her daughter in connection with her marriage, cannot by any stretch of imagination be regarded as a gift. The same view was taken by the Deputy Commissioner (Appeals) and we confirm the same.