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TMI Blog1982 (6) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding in a plot of about 35 cents, 1.09 acres of garden land and 2.12 acres of wet land. The value of these items was declared in the gift deed as Rs. 10,000. The donor died on 31-1-1975. The donee, after graduation from Kerala University, on completing the MBBS course and undergoing house surgeoncy for a period of one year, went abroad and had his higher studies and research in Canada. He had taken a degree in MD and had been doing research work in Canada. 3. In response to a notice under section 16(1) of the Act issued by the GTO, the legal representative of the donor filed a return showing the value of the gifted properties at Rs. 10,000. The assessee claimed that the gift was made solely and exclusively for the purpose of education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Travelling expenses back to India 10,000 --------------- 29,461 --------------- The AAC agreed with the GTO that the assessee is not eligible for the exemption. The reasons given by the AAC for upholding the assessment order, are that the asset had not at all been used for educational purposes and that the gift is not specified to be used for educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the gift cannot be construed as one for the purpose of education of the donee and that the expression 'abhivridhi' cannot be understood as including educational needs. It was also pointed out that the assessee before proceeding to Canada, had been working in private hospitals in Kerala and had gone abroad for better employment, and not for higher studies, and even if he had acquired higher qualification while he was abroad, that circumstance cannot be taken into account in determining the extent to which the gift has been proved to be reasonable. The departmental representative relied on the decision in N. Durgaiah v. CGT [1975] 99 ITR 477 (AP) and contended that in order to obtain the exemption under section 5(1)(xii), the assessee must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have been completely ignored by the father when he made the gift. The proper view to be taken is that the gift was made by the father to his son so that the son need not depend upon his father for his general needs. The word 'abhivridhi' when applied to a person who is a student would take in his educational needs also. In that view, the gift must be taken as a composite one for both education and welfare of the donee. We are supported in this view by the decision of the Kerala High Court in the case of Mary Antony. In that case, the assessee who was advanced in age, made a gift of some property to his son for purposes of his 'kalakshepam'. The son was studying in a college. It was held that in the context in which it was used in the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al expenditure has been met out of the gifted property. The Act allows exemption to the extent to which the gift is reasonable having regard to the circumstances of the case. The GTO has to take into consideration the income of the donor, the nature of the education that is being or proposed to be given to the donee, and then decide whether and how far the gift is reasonable. The circumstances to be regarded are, the status and position of the family and the nature of the education proposed. The materials placed on record clearly show that the donee at the time when gift was made was undergoing a professional course and that the donor was in a position to make provisions for his higher studies either in India or abroad. It is disclosed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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