Legal obligation to maintain and marry daughters was valid consideration, so the property transfer was not a taxable gift.

A transfer by a father to his unmarried daughters in discharge of a legally enforceable duty to maintain and provide for their marriage was treated as supported by valid consideration. Because that consideration was adequate and capable of being assessed in money, the transfer did not fall within the part of section 2(xii) of the Gift-tax Act, 1958 that applies only to transfers without consideration. The obligation under section 20 of the Hindu Adoptions and Maintenance Act, 1956, was accepted as lawful consideration, so the transaction was not a taxable gift.

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Issues: Whether transfer of property by a father to his unmarried daughters in discharge of the obligation to maintain and marry them off constituted a gift under section 2(xii) of the Gift-tax Act, 1958.

Analysis: The transfer was made in discharge of a legal liability to maintain and provide for the marriage of the unmarried daughters. The source of that liability was immaterial; what mattered was the existence of the obligation itself. Where the consideration for the transfer was found to be adequate and had been assessed in money terms, the transaction could not fall within the part of section 2(xii) that applies only to transfers without consideration. The obligation under section 20 of the Hindu Adoptions and Maintenance Act, 1956, was treated as a valid legal consideration.

Conclusion: The transfer was for valid and adequate consideration and was not a gift liable to gift-tax.

Ratio Decidendi: A transfer made in discharge of a legally enforceable obligation to maintain and marry unmarried daughters, where the consideration is adequate and measurable in money, is not a gift within section 2(xii) of the Gift-tax Act, 1958.

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