Gift-tax on marriage payment to daughter upheld where paternal maintenance obligation ended on marriage.

A marriage payment made by an assessee to his daughter was treated as a taxable gift because the court held that, under the earlier precedent applied, a Christian father's obligation to maintain his daughter ends on her marriage and does not continue so as to characterise the payment as support discharged under a subsisting legal duty. The amount paid at the time of marriage was therefore not exempt from gift-tax on that basis, and the questions referred were answered against the assessee. The alternative contention that the payment was made on behalf of the assessee, his wife and son had not been examined below and was left open for fresh consideration by the Tribunal or other appropriate authority if remittal became necessary.

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Issues: Whether the amount given by the assessee to his daughter at the time of marriage was a taxable gift exigible to gift-tax.

Analysis: The assessment year was 1987-88 and the amount of Rs. 2 lakhs was paid to the daughter on her marriage. The court followed its earlier decision holding that a Christian father's obligation to maintain his daughter ceases on her marriage and thereafter the obligation rests with the husband. On that basis, the sum paid at the time of marriage could not be excluded from gift-tax on the footing that it was supported by a continuing paternal obligation. The alternative contention that the amount was paid on behalf of the assessee, his wife and son had been raised below but was not examined by either appellate authority.

Conclusion: The referred questions were answered against the assessee and in favour of the Revenue. The alternative contention was directed to be considered afresh by the Tribunal or by the appropriate authority if remittal was found necessary.

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