Marriage obligation transfer not a taxable gift when shares are given by a Hindu undivided family in discharge of that duty.

A transfer of shares by a Hindu undivided family to a daughter in connection with her marriage was treated as a discharge of the family's moral and legal obligation, not a voluntary transfer without consideration. The expression "on the occasion of marriage" was read broadly enough to cover a transfer made about six months later, because the marriage remained the operative occasion for the transaction. On that footing, the transfer did not fall within the charging definition of a taxable gift under the Gift-tax Act, and exemption under section 5(1)(vii) did not become the basis of relief.

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Issues: (i) Whether the transfer of shares by the Hindu undivided family to the daughter on the occasion of her marriage constituted a taxable gift under section 2(xii) of the Gift-tax Act; (ii) whether exemption under section 5(1)(vii) of the Gift-tax Act was available.

Issue (i): Whether the transfer of shares by the Hindu undivided family to the daughter on the occasion of her marriage constituted a taxable gift under section 2(xii) of the Gift-tax Act.

Analysis: The definition of gift requires a voluntary transfer without consideration. The transfer was made to discharge the Hindu undivided family's moral and legal obligation to provide for the daughter's marriage, and the expression "on the occasion of marriage" was treated as wider than "at the time of marriage". A time gap of about six months did not break the nexus, since the marriage occasion continued to explain the transaction. The nature of the property given was not material so long as the transaction was made in discharge of that obligation.

Conclusion: The transfer did not constitute a taxable gift under section 2(xii) of the Gift-tax Act and was in favour of the assessee.

Issue (ii): Whether exemption under section 5(1)(vii) of the Gift-tax Act was available.

Analysis: The exemption was considered only as an alternative, but once the transfer was held not to be a gift at all, the question of exemption did not arise. In any event, the statutory language was viewed as inapplicable to a Hindu undivided family in the manner contended.

Conclusion: Exemption under section 5(1)(vii) was not the basis of relief, and the assessee succeeded because the transfer was outside the charging provision.

Final Conclusion: The appeal succeeded because the impugned transfer was held to be a discharge of the family's marriage obligation and not a taxable gift under the Act.

Ratio Decidendi: A transfer made by a Hindu undivided family in discharge of its moral and legal obligation towards a daughter's marriage is not a voluntary transfer for gift-tax purposes merely because it is made some time after the marriage, provided the marriage remains the occasion for the transaction.

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