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TMI Blog1988 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... this case gift is by the HUF and HUF are having coparceners and the member of the HUF and not.the children of the HUF." 2. The Commissioner (Appeals), however, held that the assessee was entitled to the exemption u/s. 5(1)(xii) on both the grounds : (a) that the GTO was wrong in holding that the karta of HUF cannot make gift to his own children; and (b) the gifts were reasonable in view of the fact that the parents were highly educated and the karta had no son but only two daughters. 3. At the time of hearing before us the learned D. R. argued that the HUF cannot have children and therefore section 5(1) (xii) was not applicable, relying upon the Tribunal's decision dated 22-3-1982 in G. T. A. No. 16/Ahd. /1981 Ahmedabad Bench "C". He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s wife." This shows that the Court considered the very fact that the gift had been made by the sole surviving coparcener was sufficient evidence that the gift had been made in the capacity of an individual. The facts here are materially the same. Although in that case the gift was made to the wife while in this case it has been made to the daughters, it can be said that the capacity in this case was also of an individual. This decision in the case of M. S. P. Rajah was not considered by this Tribunal in its order in G. T. A. No. 16/Ahd. /1981. Therefore, we are of the view that the exemption u/s. 5(1) (xii) is available to the assessee. 6. The next question is regarding reasonability of the gifts. From the details supplied by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned brother. The assessee made two gifts of Rs. 89,467 to minor Amrita and Sheela. The gift comprised of 263 ordinary shares of Sarangpur Cotton Mfg. Co. Ltd., valued at Rs. 380 per share. The total value of gift as made to each of the donees was determined at Rs. 89,467 on basis of the average price as debited in the books. It is observed in para 6 of the order of my learned brother that donee Amrita has wealth amounting to Rs. 5.24 lakhs while donee Sheela has wealth of Rs. 3.36 lakhs. Regarding their present education, Amrita is studying in M. A. with Archaeology at Pune, Sheela holds degree of B. Sc. Regarding their future plans Amrita is intending to obtain a Doctorate in Archaeology and Sheela intends to get a Post-graduate degree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember u/s. 23(11) of the Act : "Whether on facts and in the circumstances of the case the gift made to donee Amrita is exigible to exemption u/s. 5(1) (xii) of the Gift-tax Act ?" THIRD MEMBER ORDER Per Shri K. C. Srivastava, Vice President - In the above departmental appeal there was a difference of opinion between the learned Accountant Member and the learned Judicial Member and the following point of difference has been referred to me u/s. 23(11) of the Gift-tax Act by the President : "Whether, on the facts and in the circumstances of the case, the gift made to donee Amrita is exigible to exemption u/s. 5(1) (xii) of the Gift-tax Act ?" 2. There is no dispute about the facts and the point of difference is very narrow. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the gift to Amrita. The Judicial Member held that there was a wealth of more than Rs. 5 lakhs in the name of Amrita and at the time when the appeal was being heard in 1985 Amrita had done her M. A. and was to go in for a Doctorate. He held that the further education could be in India for which no special provision was required and her wealth was enough for this purpose. Hence, he held that the gift to Amrita would not be eligible for exemption under the provisions of section 5(1) (xii) of the Gift-tax Act. The Accountant Member, however, held otherwise and he thought a part of the provision to be reasonable having regard to the tradition of high education in the family, he noted that the mother of the daughters was Ph. D. in Chem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... children in the family. He further submitted that though the position was to be taken as at the time of gift the later events have shown that the provision was justified as in later years much larger expenditure has been incurred on the education of the two daughters. Both of them were having education abroad and Amrita after her M. A. has proceeded to USA in August 1987 for graduation in South Asian Languages and Civilization at a University at Chicago in USA. The education is to continue for 6 years. 6. I have considered the facts of the case and I am inclined to agree with the learned Accountant Member. Firstly, the question of reasonableness of gift had to be considered at the time of the gift when the two daughters were rather small ..... X X X X Extracts X X X X X X X X Extracts X X X X
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