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Issues: Whether a gift made by the karta of a Hindu undivided family to his wife out of Hindu undivided family assets is entitled to exemption under section 5(1)(viii) of the Gift-tax Act, 1958.
Analysis: The expression "donor" in section 2(ix) is wide enough to include any person who makes a gift, and the provision does not require the donor to be the individual owner of the property. A karta, if competent under Hindu law and acting within the permissible limits of gift of joint family property, can validly transfer family property. The exemption under section 5(1)(viii) turns on the nature of the gift and the relationship of the donee as spouse, not on a narrow reading that excludes a karta acting for the family. The gift was made out of family assets and no material showed that the gift was beyond the karta's lawful competence.
Conclusion: The gift was entitled to exemption under section 5(1)(viii) of the Gift-tax Act, 1958, and the question was answered in favour of the assessee.
Final Conclusion: The reference was answered by upholding the assessee's entitlement to exemption on a gift made by the karta of a Hindu undivided family to his wife from family assets.
Ratio Decidendi: A karta competent to make a gift of joint family property within the limits recognised by Hindu law may be treated as a valid donor for purposes of the statutory exemption for gifts to a spouse.
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