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Issues:
Whether the transfer of shares made by the assessee to another individual can be treated as a gift under the Gift-tax Act, 1958. Analysis: The appeal involved a question regarding the transfer of 50,000 equity shares to an individual and whether it constituted a gift under the Gift-tax Act, 1958. The assessee initially declared a gift in the return but later revised it to nil, leading to assessment by the Gift Tax Officer (GTO) treating the transfer as a gift. The Commissioner (Appeals) held that there was no measurable consideration in terms of money's worth and rejected the argument of a marriage agreement as consideration for the transfer. The assessee contended that the transfer was not a gift but part of a pre-nuptial agreement. The departmental representative relied on various court decisions to support the assessment. The Tribunal considered the deed of settlement dated 18-7-1980, where the transfer of shares was made in consideration of the lady agreeing to marry the assessee. The settlement was deemed a pre-nuptial agreement, and the Tribunal discussed the concept of marriage under Hindu law as a holy union. Referring to legal precedents, the Tribunal emphasized that adequate consideration for a transfer should be measurable in terms of money or money's worth. The Tribunal highlighted that a promise to marry, though valid consideration for a contract, does not constitute adequate consideration for a gift. The Tribunal also discussed a case where a transfer in consideration of a forthcoming marriage was not considered adequate consideration under tax laws. The Tribunal concluded that the shares were transferred without money or money's worth consideration, making it a gift under the Gift-tax Act, 1958. In light of the above analysis, the Tribunal upheld the decision of the Commissioner (Appeals) to tax the transfer as a gift. The appeal by the assessee was dismissed, affirming the taxation of the transfer of shares as a gift under the Gift-tax Act, 1958.
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