Gift-tax exemption for charitable trust upheld where educational objects outweighed any religious character of the trust's purpose.

A gift of immovable property to a public charitable trust was held exempt from gift-tax under section 5(1)(v) of the Gift-tax Act, 1958 because the trust's objects were not wholly or substantially religious in nature. The trust aimed both to impart education and to promote the study and practice of the Shwetamber Jain Murtipujak religion among students and others without distinction. Section 5(1A) denied exemption only where the gift was for a purpose the whole or substantially the whole of which was religious. On the stated objects, the charitable character remained dominant, so the exemption applied in favour of the assessee.

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Issues: Whether a gift of immovable property to a public charitable trust was exempt from gift-tax under section 5(1)(v) of the Gift-tax Act, 1958, having regard to section 5(1A) excluding gifts for a purpose the whole or substantially the whole of which is of a religious nature.

Analysis: The trust's objects included imparting education and promoting the study and practice of the Shwetamber Jain Murtipujak religion among students and others without distinction. For the exemption to be denied, the purpose of the gift had to be one the whole or substantially the whole of which was of a religious nature. On the stated objects of the trust, the charitable element was not displaced by a predominantly religious character.

Conclusion: The gift was exempt under section 5(1)(v) of the Gift-tax Act, 1958, and the question was answered in the negative, in favour of the assessee.

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