Marriage expenses paid by a Hindu parent were treated as discharge of obligation, not a taxable gift, under Gift-tax principles.

A Hindu parent's provision for an unmarried daughter's marriage expenses is not a taxable gift to the extent it is made in discharge of a legal or moral obligation. Where the transfer is referable to maintenance and marriage expenses and is supported by family circumstances and community practice, it lacks the gratuitous element required for gift-tax. The Tribunal also treated the marriage-related provision as falling within the applicable exemption under section 5(1)(vii) to the extent the statutory conditions were satisfied, and relief was allowed accordingly.

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Issues: (i) Whether the amounts and articles given by a Hindu father to his daughter on the occasion of her marriage were gifts exigible to gift-tax, or were transfers made in discharge of a legal or moral obligation and therefore outside the charge of gift-tax; (ii) whether, on the facts of the family and community practice, the transfer could be treated as a marriage-related provision entitled to exemption under section 5(1)(vii) of the Gift-tax Act, 1958.

Issue (i): Whether the amounts and articles given by a Hindu father to his daughter on the occasion of her marriage were gifts exigible to gift-tax, or were transfers made in discharge of a legal or moral obligation and therefore outside the charge of gift-tax.

Analysis: The obligation of a Hindu to maintain an unmarried daughter includes reasonable expenses incidental to her marriage. A transfer made to discharge that obligation is not a gratuitous gift. The reasoning proceeded on the principle that, where the provision is referable to maintenance and marriage expenses and is supported by the family's circumstances and community practice, the transfer lacks the essential element of a gift for gift-tax purposes.

Conclusion: The transfer was not chargeable to gift-tax to the extent it represented discharge of the father's obligation towards his daughter's marriage expenses, and the assessee succeeded on this issue.

Issue (ii): Whether, on the facts of the family and community practice, the transfer could be treated as a marriage-related provision entitled to exemption under section 5(1)(vii) of the Gift-tax Act, 1958.

Analysis: The facts showed that the assessee had only daughters, the provision was made on the occasion of marriage, and the surrounding circumstances supported the conclusion that the amounts were given in accordance with the family and community practice. The Tribunal accepted the finding that the provision was made in consideration of the marriage, and that the assessing authority had already allowed the statutory exemption available for any balance treated as gift.

Conclusion: The addition was not sustainable, and the assessee was entitled to relief under section 5(1)(vii) to the extent applicable.

Final Conclusion: The marriage-related provision was treated as a non-taxable discharge of obligation on the facts found, and the departmental appeal failed.

Ratio Decidendi: A transfer by a Hindu parent for an unmarried daughter's marriage expenses, when made in discharge of a legal or moral obligation and in accordance with family or community practice, is not a taxable gift to that extent under the Gift-tax Act.

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