Educational provision for minor daughters qualifies for gift-tax exemption when assessed on family circumstances and likely schooling costs.

A provision set apart for minor daughters was treated as reasonable educational expense and exempt under section 5(1)(xii) of the Gift-tax Act, because the amount was assessed against the family's social and financial position, the period needed for education, and the likely educational costs. The Tribunal's estimate of Rs. 80,000 for each daughter was based on relevant considerations and was not shown to be arbitrary or erroneous. As the amount was regarded as covering education, the alternative question of marriage provision did not need to be examined, and the position favoured the assessee.

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Issues: Whether the sum of Rs. 1,60,000 set apart for the assessee's minor daughters was to be treated as a provision for reasonable educational expenses and exempt under section 5(1)(xii) of the Gift-tax Act.

Analysis: The amount was assessed in the context of the family's social and financial position, the period needed for education according to their standard of life, and the likely educational expenditure. The Tribunal made its own estimate and fixed Rs. 80,000 for each daughter as sufficient for education. Such an estimate was based on relevant considerations and could not be interfered with unless shown to be arbitrary or wrong. As the amount was held to cover education, it was unnecessary to go into the alternative question relating to marriage provision.

Conclusion: The provision of Rs. 1,60,000 was correctly construed as a provision for education and the answer was in favour of the assessee and against the Department.

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