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Issues:
- Appeal against order of AAC, O-Range, Bombay regarding gift tax assessment for ornaments given to daughter after her marriage. - Interpretation of exemption under section 5(1)(vii) of the Gift-tax Act, 1958 for gifts made on the occasion of marriage. - Determination of dependency of married daughter for gift tax purposes. - Consideration of customs and traditions regarding gifts of jewellery on marriage occasions. - Application of legal principles in distinguishing between gift of immovable and movable property. Detailed Analysis: The appeal before the ITAT BOMBAY-D involved a dispute over the gift tax assessment for ornaments given by the assessee to his daughter after her marriage. The assessee claimed exemption under section 5(1)(vii) of the Gift-tax Act, 1958, stating that the gift was made on the occasion of his daughter's marriage and therefore exempt up to a certain limit. The GTO rejected this claim, citing the absence of a gift deed and the daughter's married status as reasons. The AAC upheld the GTO's decision, determining that the daughter, being married, was no longer dependent on the assessee for support, thus disqualifying the gift from the exemption. The assessee contended that according to custom, gifts of jewellery are traditionally given the day following a marriage, as it is considered an auspicious occasion for such gifts. The assessee's counsel argued that until the daughter leaves her parental home for her husband's residence, she remains dependent on her parents for support, challenging the notion that marriage automatically severs this dependency. The departmental representative, however, relied on legal precedents to support the revenue authorities' position, emphasizing the requirement for a formal gift deed and the daughter's marital status as grounds for disallowing the exemption. Upon review, the ITAT observed that while immovable property gifts necessitate formal documentation, gifts of movable property, such as jewellery, can be effectuated through delivery. The tribunal interpreted "on the occasion of marriage" to encompass not only the marriage ceremony but also subsequent rituals before the bride's departure from her parental home. Recognizing the customary practice of gifting jewellery during marriage celebrations without formal deeds, the ITAT concluded that the daughter's dependency on her parents persisted until she left with her husband, justifying the exemption claim under section 5(1)(vii). In light of these considerations, the ITAT allowed the assessee's appeal, ruling in favor of the exemption claim and canceling the gift-tax assessment. The judgment underscored the significance of customary practices, the distinction between immovable and movable property gifts, and the continued dependency of a married daughter until her departure from her parental home, culminating in a favorable outcome for the assessee.
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