SECTION 2(xii ) l GIFT

1435. Whether gifts made by karta on marriage of his daughter fall within the ambit of “gift” under clause (xii)

In the case of CGT v. Basant Kumar Aditya Vikram Birla [1982] 137 ITR 72 (Cal.), the karta of the assessee-HUF gave jewellery, cash and fridge of the value of Rs. 67,744 to his daughter at the time of her marriage. The assessee-HUF claimed that these were marriage expenses and did not fall within the ambit of the term “gift” as defined in section 2(xii) of the Gift-tax Act, 1958. The Calcutta High Court has upheld the assessee’s contention on the ground that being an unmarried daughter of the family the daughter has a right to have the expenses of her marriage incurred out of the joint family fund. The joint family is under a legal obligation to provide for such marriage expenses. The Department has accepted, in principle, the judgment of the  High Court.

Circular: No. 419 [F. No. 333/3/85-GT], dated 1-6-1985.

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