Gift in contemplation of death can be inferred from circumstances even without an express reversion clause in the deed.

A gift of movable property by a seriously ill donor who died shortly after execution may qualify as a gift in contemplation of death for exemption under section 5(1)(xi) of the Gift-tax Act, 1958. The governing requirements are illness with expectation of imminent death, delivery of possession to the donee, and a defeasible gift that would fail if the donor recovered. An express recital in the deed that the property would revert on recovery is not essential, because the defeasible character may be inferred from surrounding circumstances, including the donor's condition and the timing of death. Gifts made during marz-ul-maut may also fall within the same principle.

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Issues: Whether a gift of movable property made by a seriously ill donor, who died shortly thereafter, was a gift made in contemplation of death for the purposes of exemption under section 5(1)(xi) of the Gift-tax Act, 1958, and whether an express recital in the deed that the property would revert on recovery was necessary.

Analysis: Section 5(1)(xi) grants exemption to gifts made in contemplation of death, and explanation (d) refers to the meaning in section 191 of the Indian Succession Act, 1925. The governing requirements are that the gift must be of movable property, the donor must be ill and expect to die shortly, possession must be delivered to the donee, and the gift must be defeasible if the donor recovers. The absence of an express clause in the deed is not decisive, because the condition that the gift takes effect only on death may be inferred from surrounding circumstances, including the donor's serious illness, apprehension of death, delivery of possession, and death soon after execution. A gift made during marz-ul-maut may also satisfy these requirements where the essentials of a gift in contemplation of death are present.

Conclusion: An express reversionary recital was not necessary, and the gift was rightly treated as one made in contemplation of death and eligible for exemption under section 5(1)(xi) of the Gift-tax Act, 1958.

Ratio Decidendi: A gift of movable property made by a donor in serious illness, with delivery of possession and death shortly thereafter, may be treated as a gift in contemplation of death even without an express clause of revocation or reversion in the instrument, because the defeasible character of such a gift can be implied from the circumstances.

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