Marriage-linked gifts qualify for gift-tax exemption where they are proximately connected to the wedding event, even if executed later.

For section 5(1)(vii) of the Gift-tax Act, 1958, a gift is made "on the occasion of the marriage" if it has a real and proximate connection with the marriage event; it is not confined to gifts executed on the wedding day itself. Gifts made after the marriages of the assessee's son and daughter were held to qualify because the marriage was the reason for the gifts, the intention existed at the time of the marriages, and the delay in execution was satisfactorily explained. The exemption was therefore available and the assessee succeeded.

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Issues: Whether gifts made to the assessee's son and daughter after their marriages were exempt under section 5(1)(vii) of the Gift-tax Act, 1958 as gifts made on the occasion of the marriage.

Analysis: The expression "on the occasion of the marriage" was held not to mean only gifts made simultaneously with, or immediately before, the marriage. The relevant test was whether the gift was associated with the marriage event and whether the marriage was the reason or immediate cause for the gift. Gifts may precede or follow the ceremony if they are part of the marriage arrangement or are intended in discharge of a subsisting familial obligation connected with the marriage. On the facts, the gifts were intended at the time of the marriages and the delay in execution was satisfactorily explained, so the necessary connection with the marriage was established.

Conclusion: The gifts were covered by section 5(1)(vii) and the exemption was available to the assessee.

Final Conclusion: The reference was answered in favour of the assessee, and the Revenue's challenge to the exemption failed.

Ratio Decidendi: For purposes of section 5(1)(vii) of the Gift-tax Act, 1958, a gift is made "on the occasion of the marriage" if it has a real and proximate association with the marriage event; the provision is not confined to gifts executed on the wedding day itself.

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