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Issues: Whether a Christian father's payment of Rs. 85,001 to his daughter at the time of her marriage constituted a gift liable to gift-tax, or whether it was a payment made in discharge of a legal obligation of maintenance and marriage.
Analysis: The payment was examined in the light of the father's duty to maintain his daughter, the prevailing Christian custom in the relevant region, and the principle that where a payment is made in discharge of a pre-existing legal obligation it is not voluntary and is not without consideration. The reasoning accepted that the obligation to maintain and suitably marry a daughter is not confined to Hindu personal law, and that justice, equity and good conscience, together with customary practice, support recognition of such an obligation for Christians as well. On that basis, the amount paid at marriage was treated as discharge of a maintenance obligation rather than as a gratuitous transfer within the meaning of the Gift-tax Act, 1958.
Conclusion: The payment was not a taxable gift and the addition to gift-tax could not stand.
Ratio Decidendi: A reasonable payment made by a father to his daughter at the time of her marriage in discharge of a recognised legal or customary obligation of maintenance and marriage is not a voluntary transfer without consideration and therefore does not constitute a gift liable to tax.
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