1981 (7) TMI 28 - HC - Income Tax

Summary

Issues Involved:
1. Whether the jewellery, cash, and fridge given by the assessee to Smt. Jayasree Mohta at the time of her marriage fall within the ambit of the term "gift" as defined in section 2(xii) of the Gift-tax Act, 1958.

Issue-wise Detailed Analysis:

1. Legal Obligation of HUF to Incur Marriage Expenses:
The primary issue was whether the jewellery, cash, and fridge given by the assessee-HUF to Smt. Jayasree Mohta at the time of her marriage constituted a "gift" under section 2(xii) of the Gift-tax Act, 1958. The assessee claimed these were marriage expenses and thus not gifts. The Tribunal found that there was a legal obligation on the HUF to perform the marriage of daughters and that the amounts spent were legitimate marriage expenses, not gifts. This was based on established Hindu law principles, as cited from Mulla's Hindu Law and the judicial precedent in Rajagopala Ayyar v. Venkataraman.

2. Definition of "Gift" under the Gift-tax Act:
Section 2(xii) of the Gift-tax Act defines "gift" as a transfer of property made voluntarily and without consideration in money or money's worth. The Tribunal held that the expenditure incurred by the HUF on the marriage of Smt. Jayasree Mohta was not a transfer without consideration, as it was in discharge of a legal obligation. Therefore, it did not fall within the ambit of "gift" under the Act.

3. Case Law and Legal Precedents:
The judgment referenced several legal texts and case laws to support the conclusion. Mulla's Hindu Law was extensively cited to establish that marriage expenses of daughters are a legitimate charge on the joint family property. The Supreme Court's observations in Guramma Bhratar Chanbasappa Deshmukh v. Mallappa Chanbasappa and V. D. Deshpande v. K. D. Kulkarni were also cited to reinforce the legal obligation of the HUF to incur marriage expenses.

4. Moral vs. Legal Obligation:
The revenue contended that the obligation to incur marriage expenses was moral rather than legal. However, the court rejected this argument, stating that under Hindu law, the obligation to incur marriage expenses for daughters is both a legal and moral obligation. This was further supported by the Hindu Adoptions and Maintenance Act, 1956, which includes marriage expenses under "maintenance."

5. Adequacy of Consideration:
The court also addressed the argument that the expenditure was without consideration in money or money's worth. It was held that the daughter's right to have her marriage expenses met out of the family fund constituted adequate consideration.

6. Precedents on Gifts and Legal Necessity:
The court referred to several precedents, including Keshub Mahindra v. CGT and P. J. P. Thomas v. CIT, to discuss the concept of "consideration in money or money's worth." It concluded that the payment made in discharge of a legal obligation does not constitute a gift.

7. Conclusion:
The court concluded that the Tribunal was correct in holding that the amounts spent on Smt. Jayasree Mohta's marriage did not constitute a "gift" under section 2(xii) of the Gift-tax Act. The question was answered in the affirmative, in favor of the assessee, and no costs were awarded.

In summary, the judgment affirmed that the expenditure incurred by the HUF for the marriage of its daughter was a legitimate charge on the family property and did not constitute a gift under the Gift-tax Act.