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TMI Blog1984 (10) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... osits of Rs. 1,00,000 with one Gopalakrishna Mills and Rs. 60,000 with one Ramakrishna Mills which were transferred by the karta of the Hindu undivided family to his minor daughter, Padmini. On the basis that the assessment as made was pre-judicial to the interests of the Revenue, he took recourse to the provisions of section 24(2) of the Gift-tax Act, hereinafter referred to as " the Act " and passed an order on October 26, 1977, directing the Gift-tax Officer to include in the assessment a sum of Rs. 1,60,000 as gift liable to gift-tax. Aggrieved by the order of the Commissioner of Gift-tax, the assessee went on appeal to the Appellate Tribunal. Before the Tribunal it was contended by the assessee that the provision of a sum of Rs. 1,60,000 for Padmini could not have been considered as a gift either actual or deemed because (1) it was the legitimate right of an unmarried daughter to be maintained out of the family property, (2) the provision made was reasonable considering that Padmini was the only daughter of the karta, and (3) the sum of Rs. 1,60,000 is a provision made to Padmini for giving her proper education, both in India and abroad, and therefore, it was exempt from gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain the minor child, (2) that the transfer was for the purpose of educating the child, and (3) that it is by way of partition. The Tribunal has upheld the claim of the assessee that the transfer has been made with a view to discharge the obligation of the Hindu undivided family to maintain the minor child and, therefore, the transaction will not amount to a gift. The Tribunal further observed that if the transfer is treated as a gift, the exemption under section 5(1)(xii) will arise in which case a sum of Rs. 75,000 alone can be taken as a reasonable sum for the education of the minor and the balance has to be assessed. But having regard to its finding on the main question that the transfer is not a gift, the assessee's claim was upheld without going into the further question as to whether the transfer can be taken as and by way of partition. The learned counsel for the Revenue brings to our notice the decision of this court in M.S.M. Ratnaswami Nadar v. CIT [1975] 100 ITR 669 in Support of his contention that unless the consideration is found to be valuable and adequate consideration measurable in terms of money or money's worth, the transfer should be taken to be a gift. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he minor daughters had done in return for the creation of the said trusts by the assessee, nor had they suffered any detriment in return for the same, that there was no consideration, leave alone adequate consideration, moving from the minors in return for the creation of the two trusts by the assessee and, therefore, the properties transferred by way of trust should be included in the net wealth of the assessee. It was also urged before the court that the creation of the trusts was in discharge of the father's obligation to maintain the two children and, therefore, there is adequate consideration. Rejecting that contention, the court held that the obligation to maintain the children is a personal obligation which the law governing the party imposes upon the assessee as the father of the minor daughters and he cannot by any voluntary or unilateral act of his own get rid of that legal obligation. In that case, the Bombay High Court referred with approval to the Full Bench decision of the Kerala High Court in CIT v. Paily Pillai [1972] 86 ITR 516, wherein it has been held that a transfer by way of trust executed by the father in favour of his minor son in the case before them can onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere valid and accordingly the income from the gifted properties as well as their value cannot be included in the income-tax or wealth-tax assessments of the assessee. Reference is also made to the decision in CGT v. Radhakrishna Gade Rao [1983] 143 ITR 260, wherein Division Bench of this court, to which one of us was a party, had held that the settlement of property by the karta of a Hindu undivided family on the unmarried daughter could be said to be in discharge of the legal obligation of the Hindu undivided family and, therefore, it could not be considered to be a gift as defined in section 2(xii) of the Act. Reliance is also placed on an unreported decision of this court in T.C. No. 667 of 1976 dated September 9, 1982, since reported as Controller of Estate Duty v. Dr. B. Kamalamma [1984] 148 ITR 434, wherein this court has held that the liability of the family to maintain the minor daughter and her right to enforce the same against the family property is well established and that the said right is also recognised by the Hindu Adoptions and Maintenance Act, 1956. In that case, the court held that the estimated provision of Rs. 50,000 for the marriage of the assessee's daughter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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