Wealth-tax gift to prospective daughter-in-law excluded where marital relationship had not yet crystallised at the time of transfer.

Section 4(1)(a)(v) of the Wealth-tax Act did not apply where jewellery was gifted before the donee became the assessee's son's wife under Hindu law. The marriage was incomplete until Saptapadi was performed, so the recipient remained only a prospective daughter-in-law on the date of gift. The provision was read as requiring the specified relationship to exist both at the time of transfer and when the charging condition is tested on the valuation date. On that basis, the gifted jewellery could not be included in the assessee's wealth.

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Issues: Whether section 4(1)(a)(v) of the Wealth-tax Act, 1957 applied to a gift made to a prospective daughter-in-law before the marriage was completed by Saptapadi.

Analysis: The marriage under Hindu law was not complete until the seventh step of Saptapadi was taken. The jewellery was found to have been gifted before Saptapadi commenced, at a stage when the donee was only a prospective daughter-in-law and not yet the son's wife. The language of section 4(1)(a)(v) was read as requiring the relationship of son's wife to exist not merely on the valuation date but also on the date of gift. Support was drawn from the analogous rule under section 16(3)(a)(iii) of the Indian Income-tax Act, 1922, where the relationship must subsist at the time of transfer as well as at the time income accrues.

Conclusion: Section 4(1)(a)(v) was not attracted, and the value of the gifted jewellery could not be included in the assessee's wealth.

Ratio Decidendi: A deeming provision fastening tax liability on a transfer to a relative applies only if the specified relationship exists both when the asset is transferred and when the charging condition is tested.

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