Marriage promise not being money's worth, share transfer under the agreement was treated as a taxable gift.

Transfer of 20,000 shares to the intended spouse under the 5 December 1969 agreement was held to be a "gift" under section 2(xii) of the Gift-tax Act because, on the factual findings, the transfer was made only in consideration of the recipient's agreement to marry the assessee. The Court treated a promise of marriage as valid contractual consideration, but not as consideration in money or money's worth for gift-tax purposes. Alleged additional considerations, including giving up employment and supporting parents, were rejected as unsupported by the agreement and the record. The transfer was therefore chargeable to gift tax.

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Issues: Whether the transfer of 20,000 shares made by the assessee in favour of the intended spouse under the agreement dated 5 December 1969 constituted a "gift" within the meaning of section 2(xii) of the Gift-tax Act, 1958.

Analysis: The transfer was found, on binding findings of fact, to have been made only in consideration of the recipient's agreement to marry the assessee. The Court held that while a promise of marriage may be valid consideration in contract law, it is not consideration in money or money's worth for the purposes of the Gift-tax Act. The additional alleged considerations of giving up employment and supporting parents were rejected as unsupported by the agreement and the factual record.

Conclusion: The transfer fell within the statutory definition of "gift" and was chargeable to gift tax.

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