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Whether the payment made by a Christian father to his daughter at the time of her marriage constitutes a gift and is taxable as such. Analysis: The appeal before the Appellate Tribunal ITAT Cochin centered on determining whether an amount of Rs. 85,001 paid by a Christian father to his daughter at the time of her marriage should be considered a gift and thus subject to gift tax. The father argued that the payment was part of his legal obligation to maintain his daughter and ensure a proper marriage. The Gift-tax Officer disagreed, stating that the payment constituted a gift and was taxable. The father's representative cited a decision from the Andhra Pradesh High Court, emphasizing that under Hindu law, obligations to daughters are considered legal duties, not voluntary gifts. The High Court held that settlements made in fulfillment of legal obligations are not gifts and are not subject to gift tax. The departmental representative argued that the Andhra Pradesh High Court decision did not apply to Christians in Kerala and that only Hindu fathers have legal obligations towards their daughters. However, the representative for the assessee referenced a Kerala High Court decision and a Madras High Court decision to support the argument that Christian fathers also have legal obligations towards their daughters, similar to Hindu fathers. The Tribunal considered the prevailing customs among Christians in Kerala and the obligation of fathers to maintain their daughters before and after marriage. After examining the legal obligations of Christian fathers, the Tribunal concluded that the payment made by the father to his daughter at the time of her marriage was not a voluntary gift but a discharge of a legal obligation. The Tribunal found that the payment was made for valid consideration and was not subject to gift tax. The Tribunal emphasized that the obligation of a Christian father to provide for his daughter's maintenance and marriage was similar to that of a Hindu father. Consequently, the Tribunal allowed the appeal, ruling in favor of the assessee. In conclusion, the Tribunal held that the payment made by the Christian father to his daughter at the time of her marriage was not a gift but a fulfillment of a legal obligation, and therefore, not subject to gift tax. The decision was based on the legal obligations of Christian fathers in Kerala, prevailing customs, and previous court judgments supporting the view that such payments are not voluntary gifts but obligations.
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