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TMI Blog1987 (2) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970, by which he gave away acres 9.94 of wet land to his married daughter, Smt. Sreedevi and acres 10.40 of wet land to his unmarried daughter, Nagamani. Notice under section 16(1) of the Act was issued calling upon the assessee to file his return. Accordingly, he filed nil return with a covering letter that there is no gift in the eye of law and that, therefore, he need not pay any gift-tax. The Gift-tax Officer held that Sreedevi is a married daughter whose marriage has taken place long back and Nagamani is an unmarried daughter. Nagamani has only a claim for maintenance and, therefore, it cannot be treated as a partition as the assessee the sole surviving co-parcener. On that premise, he rejected the contention of the assessee and valued the property at Rs. 1,05,460 and excluded Rs. 10,000 under sections 5(1)(vii) of the Gift-tax Act and assessed to gift-tax Rs. 95,460 and on appeal, the assessee was unsuccessful. In second appeal, the Appellate Tribunal found that a Hindu is under a legal obligation to make provision for maintenance of an unmarried daughter and also to make provision for a married daughter for fulfilling an earlier promise made at the time of the marriage. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersion of any property referred to in section 4, deemed to be a gift under that section." Any transaction to be a gift must come within the meaning of section 2(xii) of the Act. Then alone the liability to pay gift-tax under section 3 of the Act which is a charging section does arise. The question is, therefore, whether the document dated March 21, 1970, should be construed to be a gift. To answer this question, it is necessary to hark into the rights the married and unmarried daughters have under the Hindu law or the Hindu Adoptions and Maintenance Act, 1956, for short " the Maintenance Act ". Section 3(b) of the Hindu Adoptions and Maintenance Act defines: "'maintenance' includes . ...... (ii) in the case of an unmarried daughter, also the reasonable expenses of and incident to her marriage. " The unmarried daughter has thereby a legal right and the father has corresponding legal obligation to provide reasonable expenses as an incident to her marriage. Mr. N. R. Raghavachariar, a commentator on Hindu Law, 5th edition, states at page 1103: " The words 'incident to marriage' are used to indicate the necessity for inclusion in the expenses payable for the marriage of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch defines " maintenance " as including reasonable expenses of and incident to the marriage of daughter, the Legislature did nothing more than codify the well settled principles of Hindu law. It is further stated that so far as the unmarried daughter is concerned, the liability of her parents has no relation to her age, and it continues so long as the daughter is unable to maintain herself. In Subbayya v. Ananda Ramayya, AIR 1929 Mad 586 [FB], per majority, the Full Bench has held that in a coparcenary consisting of father and sons, the obligation of maintaining and marrying the daughters is not only on the father and through him on the coparcenary but it is an obligation on the coparcenary itself, because such an obligation, being only a historical remnant of the daughter's original right to a share in the coparcenary property, is created by birth. It was held in that case that the son's share in the joint family, on his instituting the suit for partition against his father and brothers, is also liable for the expenses of the marriage of sister who was married after the institution of the suit and of those who are still to be married. It is thus the settled legal position that und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customary occasion for such a gift. But the obligation can be discharged at any time, either daring the lifetime of the father or thereafter. It is not possible to lay down a hard and fast rule, prescribing the quantitative limits of such a gift as that would depend on the facts of each case and it can only be decided by courts, regard being had to the overall picture of the extent of the family estate, the number of daughters to be provided for and other paramount charges and other similar circumstances. If the father is within his rights to make a gift of a reasonable extent of the family property for the maintenance of a daughter, it cannot be said that the said gift must be made only by one document or only at a single point of time. The validity or the reasonableness of gift does not depend upon the plurality of documents but on the power of the father to make a gift and the reasonableness of the gift so made. If once the power is granted and the reasonableness of the gift is not disputed, the fact that two gift deeds were executed, instead of one, cannot make the gift any the less a valid one." In Smt. Kamala Devi v. Bachulal Gupta, AIR 1957 SC 434, S. K. Das J., speaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al State like Andhra Pradesh, on the occasion of the marriage of the daughter. The gift deed or settlement deed might not have been executed simultaneously with the marriage or the announcement. Later when the family itself splits up on account of partition, what had been agreed upon or announced would be reduced I to writing in the partition deed." On the second question with regard to the properties allotted to unmarried daughters, it was held (at page 512): " Undoubtedly, a Hindu joint family has an obligation to maintain and get an unmarried daughter married. That right of the unmarried, daughter to be maintained and to get married and the obligation of the family to do this may be inchoate, in the sense, that these rights and obligations do not attach to any specific property. But there is an undoubted right under the Hindu law of an unmarried daughter to be maintained and to get married and the corresponding obligation of the Hindu family to discharge these obligations cannot, therefore, be under any doubt. Once under a partition deed or a family settlement or a gift or other instrument certain properties are set apart for the maintenance and marriage of the unmarried d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth as contemplated under the Act nor can it be said to be voluntary one. Equally, the promise made at the time of the marriage of a daughter to give a reasonable portion of the property or a settlement or a gift made long after the marriage is in fulfilment of the pre-existing legal obligation of the father under the general Hindu law. Therefore, it ceases to be a voluntary act nor is it to be labelled as without consideration but is one in the discharge of a pre-existing legal obligation. Therefore, it is neither an alienation nor a transfer, attracting section 2(xii) of the Gift-tax Act, but is a family settlement. There is no taxable gift made to a married daughter. Thereby the assessee is not obliged to pay gift-tax. In Chandrasekhara Reddy's case [1976] 105 ITR 849, Divan C.J., speaking for the Division Bench, held that the Income-tax Appellate Tribunal has to go further into the question whether there is a custom in the community to discharge that obligation to execute a gift or a settlement deed subsequent to the marriage. With due deference, we express our inability to accord our approval to that view for diverse reasons. It has already been held that an opulent Hindu fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executing subsequently the instrument and, therefore, it is not a voluntary one. So, it is a family settlement and not a gift within the meaning of section 2(xii) of the Act and the assessee is not liable to gift-tax. Incidentally, it may also be mentioned that the Hindu Succession Act (Andhra Pradesh Amendment Act, 1983) introduced section 29A in Chapter IIA in the Hindu Succession Act, 1956. It provides thus: "Equal rights to daughter in coparcenary property.-Notwithstanding anything contained in section 6 of this Act (i) in a joint Hindu family governed by Mitakshara law, the daughter of a coparcener shall by birth become a coparcener in her own right in the same manner as the son and have the same rights in the coparcenary property as she would have had if she had been a son, inclusive of the right to claim by survivorship ; and shall be subject to the same liabilities and disabilities in respect thereto as the son; (ii) at a partition in such a joint Hindu family the coparcenary property shall be so divided as to allot to a daughter the same share as is allottable to a son. " and she holds the property as full owner. It is undoubtedly true that the reasonableness of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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