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Issues:
1. Rejection of claim under section 5(1)(xii) of the Gift-tax Act, 1958. Detailed Analysis: The appeal was against the order confirming the gift-tax assessment for the assessment year 1973-74. The assessee had gifted immovable properties to his son for educational purposes. The claim for exemption under section 5(1)(xii) was rejected by the AAC, stating that the asset had not been used for educational purposes and the gift was not specified for educational use. The AAC upheld the assessment order, resulting in the appeal before the ITAT Cochin. The assessee contended that the word 'abhivridhi' in the gift deed should be interpreted to include education needs, making the gift composite for education and general needs. The assessee relied on precedents to support the claim for exemption. The departmental representative argued that without a specific recital in the deed, the gift could not be considered for educational purposes. It was also highlighted that the donee had gone abroad for better employment, not just for higher studies. The ITAT Cochin analyzed the circumstances and the gift deed's language. It held that the word 'abhivridhi' encompassed both general and educational needs of the donee, especially since the donee was a medical student at the time of the gift. The tribunal referred to a similar case in Kerala High Court to support its interpretation. The ITAT Cochin concluded that the gift was intended for both education and welfare of the donee, granting the exemption under section 5(1)(xii) to a reasonable extent based on the circumstances of the case. Regarding the value of the gift, the ITAT Cochin noted that the actual expenditure did not have to be met out of the gifted property to claim exemption. It emphasized that the gift should be considered reasonable based on the donor's income and the nature of education provided to the donee. Considering the circumstances and the donor's ability to provide for higher education, the tribunal allowed a deduction of Rs. 25,000 under section 5(1)(xii), finding it reasonable based on the facts presented. The appeal was allowed in favor of the assessee.
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