Post-gift gift-tax liability does not reduce the value of gifted movables unless an existing charge or anterior liability affects them.

Gift-tax payable by the donee was not deductible in valuing gifted jewels because the liability arose only after completion of the gift and did not attach to the property. The donor remained primarily liable under the Gift-tax Act, while any recovery from the donee was only a collection mechanism. Since the gift was of movables, no statutory charge under section 30 applied, and the donee's later agreement to pay tax did not make the gift conditional, onerous, or reduce market value. Earlier cases on deduction concerned anterior liabilities or charges already burdening the property, which were absent here; no referable question of law arose.

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Issues: Whether the gift-tax liability undertaken by the donee could be deducted in computing the taxable value of the gifted jewels, and whether any referable question of law arose for a reference under section 26(3) of the Gift-tax Act, 1958.

Analysis: The liability to pay gift-tax arises only after the gift is complete. Under the Gift-tax Act, the donor is primarily liable under section 29, though recovery may be made from the donee where necessary, and section 30 creates a charge only in respect of gifts comprising immovable property. The gift in question was of jewels, so no statutory charge attached to the property. The donee's later agreement to pay the gift-tax did not make the gift conditional or onerous, nor did it affect the market value of the jewels. The Act contained no provision allowing deduction of such post-gift liability in valuing the gifted property. Earlier decisions allowing deduction concerned anterior liabilities or charges already attaching to the property and therefore affecting market value, which was not the position here.

Conclusion: The gift-tax payable by the donee was not deductible in computing the taxable value of the gifted jewels, and no referable question of law arose.

Ratio Decidendi: A post-gift liability undertaken by the donee does not reduce the market value of gifted movables for gift-tax purposes unless it is an anterior liability or charge attaching to the property and affecting its value.

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