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TMI Blog1988 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... of the HUF". 2. The CIT(A), however, held that the assessee was entitled to the exemption under s. 5(1)(xii) on both the grounds; (a) that the GTO was wrong in holding that the karta of HUF cannot 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 Departmental Representative argued that the HUF cannot have children and therefore s. 5(1)(xii) was not applicable, relying upon the Tribunal's decision dt. 22nd March, 1982 in GTA No. 16/Ahd/1981 Ahmedabad Bench "C". He also pointed out that the gifts were unreasonable in the circumstances. 4. The learned counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Tribunal in its order in GTA No. 16/Ahd/1981. Therefore, we are of the view that the exemption under 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 assessee's Advocate it is seen that one minor Daughter Amrita has wealth amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The gift comprised of 263 ordinary shares of Sarangpur Cotton Mfg. Co. Ltd. valued at Rs. 280 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 part 6 of the order of my learned brother than donee Amrita has wealth amounting to Rs. 5,24 lakhs while donee Sheela has wealth of Rs. 3.26 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 Archeology and Sheela intends to get a Post graduate degree in Nuclear Physics from U.S.A. Their father has an American degree in Engineering and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ift made to donee Amrita is exligible to exemption under s. 5(1)(xii) of the GT Act?" K.C. SRIVASTAVA, V P: 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 under s. 23(11)of the GT 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 under s. 5(1)(xii) of the GT Act?" 2. There is no dispute about the facts and the point of difference is very narrow. The assessee is an HUF. The Karta Shri Nand Kishore gifted certain shares to the two daughters Amrita and Sheela as a provision for their education. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 funds available was enough for this purpose. Hence he held that the gift to Amrita would not be eligible for exemption under the provisions of s. 5(1)(xii) of the GT Act. The Accountant Member, however, held otherwise and he thought a part of the provision to be reasonable having regard to the equal expenses incurred by the two daughters and also having regard to the tradition of high education in the family, he noted that the mother of the daughters was Ph. D. In Chemistry from Scotland. He held that 3/5 of the gift should be held to be a reasonable provision for the purpose of s. 5(1)(xii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Aug., 1987 for graduation in South Asian Languages and Civilisation at a University of 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 but as a father of enlightened family he intended to make reasonable provision for their high education. It is not a case where any other prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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