Gift-tax exemption for professional gifts requires proof of bona fide business purpose; continued use alone is not enough.

Exemption for gifts under section 5(1)(xiv) of the Gift-tax Act, 1958 is available only if the transfer is made in the course of carrying on a business, profession or vocation and is bona fide for that purpose. A deed describing the transfer as made out of love and affection, without evidence that the gift was connected with the donor's profession or intended to advance it, does not satisfy that test. Continued use of the gifted property in the same manner, or a general claim of commercial expediency, is insufficient. On the facts found, the gifts of land and a hospital building did not qualify for exemption.

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Issues: Whether the gifts of land and hospital building qualified for exemption under section 5(1)(xiv) of the Gift-tax Act, 1958 as gifts made in the course of carrying on the donor's profession and bona fide for the purpose of that profession.

Analysis: The exemption under section 5(1)(xiv) applies only where the gift is made in the course of carrying on a business, profession or vocation and is proved to have been made bona fide for the purpose of that business, profession or vocation. The deed itself described the transfer as made out of love and affection, and the record contained no evidence showing that the transfer was made in the course of the donor's medical profession or for the purpose of carrying it on. A gift is not exempt merely because the property continued to be used in the same manner as before, and the broader test of commercial expediency was not supported by the facts found.

Conclusion: The exemption was not available, and the gifts did not fall within section 5(1)(xiv) of the Gift-tax Act, 1958.

Final Conclusion: The assessee was not entitled to exemption for the disputed gifts, and the Revenue succeeded in the appeal.

Ratio Decidendi: For exemption under section 5(1)(xiv), it must be shown that the gift was made in the course of carrying on the business, profession or vocation and bona fide for its purpose; a mere continuation of use of the gifted property or general commercial advantage is insufficient.

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