Customary family transfer treated as non-gift where social obligation, not voluntary intent, governed the jewellery transfer.

A customary transfer of jewellery by a father-in-law to his daughter-in-law on the occasion of the son's marriage was treated as non-voluntary because it was made in accordance with community custom and social obligation. The reasoning held that where a transfer is compelled by a moral, social or customary duty, it does not amount to a gift. On that basis, the transfer fell outside the definition of "gift" under the Gift-tax Act and was not chargeable to gift-tax.

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Issues: Whether a transfer of jewellery by a father-in-law to his daughter-in-law on the occasion of the son's marriage, made in accordance with the community's custom and social obligation, constituted a voluntary transfer liable to gift-tax.

Analysis: The transfer was found to be customary in the assessee's community and not excessive having regard to his status. A transfer made under a customary and social obligation was treated as not voluntary. The reasoning proceeded on the basis that, if a moral obligation can exclude a transfer from the definition of gift, a social and customary obligation can do the same.

Conclusion: The transfer was not a gift within the meaning of the Gift-tax Act and was not chargeable to gift-tax.

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