Educational expense exemption under Gift-tax Act upheld on reasonable estimate of minor donee's annual costs.

Exemption under section 5(1)(xii) of the Gift-tax Act for educational expenses of a minor donee was determined on a reasonable estimate of the child's annual education cost over the relevant period. The Gift-tax Officer had allowed a lower amount, but the appellate authority enhanced the exemption to Rs. 25,000 and the Tribunal accepted that approach. The Madras High Court found no infirmity in that factual assessment and declined to interfere, thereby upholding the exemption at Rs. 25,000 and answering the issue against the assessee and in favour of the Revenue.

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Issues: Whether the exemption under section 5(1)(xii) of the Gift-tax Act, 1958, relating to educational expenses of the minor donee, was correctly fixed at Rs. 25,000.

Analysis: The assessment concerned gift-tax for assessment year 1971-72. The Gift-tax Officer allowed exemption of Rs. 5,000 under section 5(1)(xii), and the appellate authority enhanced it to Rs. 25,000 on the basis of a reasonable annual estimate of educational expenses for the child over the relevant period. The Tribunal accepted that approach. The Court found that the factual assessment made by the appellate authority and approved by the Tribunal suffered from no infirmity and did not call for interference.

Conclusion: The exemption fixed at Rs. 25,000 was upheld, and the question was answered against the assessee and in favour of the Revenue.

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