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Issues:
1. Interpretation of section 5(1)(xii) of the Gift-tax Act, 1958 regarding exemption for gifts made for education purposes by a Hindu undivided family. 2. Whether gifts made by a Hindu undivided family to the daughters of the karta qualify for exemption under section 5(1)(xii) of the Act. Detailed Analysis: The case involved a Hindu undivided family (HUF) that made gifts to the minor daughters of the karta, claiming exemption under section 5(1)(xii) of the Gift-tax Act for educational purposes. The Gift-tax Officer denied the exemption, stating that the gifts were excessive, made by the HUF and not the karta individually, and therefore, not eligible for exemption. The Appellate Assistant Commissioner and the Tribunal upheld this decision, reasoning that an HUF cannot have children, and thus, the exemption did not apply. The court analyzed the provisions of the Act, emphasizing that the word "person" in section 5(1) includes an HUF unless contextually restricted. It noted that specific categories for exemption were mentioned in other clauses but not in clause (xii). The court addressed the contention that only living persons could qualify for the exemption under "his children" in section 5(1)(xii). It interpreted "his children" in the context of an HUF to mean the children of the family members, including wives and unmarried daughters, as an HUF comprises all descendants from a common ancestor. The court held that gifts by an HUF to its children should be eligible for exemption under section 5(1)(xii) similar to gifts by living persons to their children. The court distinguished previous cases cited by the Revenue, stating they were not directly relevant to section 5(1)(xii). It specifically addressed the decision regarding gifts to a spouse, which was not applicable in this case. The court concluded that in the context of an HUF, children referred to the family members who are children, making gifts by an HUF to its children exempt under section 5(1)(xii). Ultimately, the court held that the Tribunal erred in denying the HUF's entitlement to exemption under section 5(1)(xii) for gifts made to the daughters of the karta for education purposes. The judgment favored the assessee, ruling in favor of the HUF and against the Revenue. The reference was answered negatively in favor of the assessee, disposing of the matter with no costs awarded.
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