Educational purpose exemption upheld for gifts to minor children where surrounding facts supported the donor's intent.

Gifts by a father to his minor children were treated as made for educational purposes, so exemption under section 5(xii) of the Gift-tax Act was allowed. The absence of an express recital in the gift deeds referring to education did not defeat the claim where the surrounding facts showed the children were minors, the elder ones were in school, and the donor was a responsible government servant with no apparent alternative purpose. The recital of love and affection was treated as the inducement for the gifts, not as negating the educational object. The quantum claimed was also considered reasonable in light of the family status and the children's normal educational needs.

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Issues: Whether gifts made by a father to his minor children qualified for exemption as gifts made for educational purposes under section 5(xii) of the Gift-tax Act, and whether the quantum of exemption claimed was reasonable.

Analysis: The absence of an express recital in the gift deeds that the transfers were made for education did not, by itself, defeat the claim for exemption. The surrounding circumstances showed that the donees were minor children, that the elder children were in school, and that the donor was a responsible government servant with no apparent reason to make gifts for any purpose other than provision for education. The recital that the gifts were made out of love and affection was treated as only the inducement for making the gifts and not as excluding education as the purpose of the gifts. The quantum claimed was also held to be reasonable having regard to the status of the parties and the normal educational needs of the children.

Conclusion: The gifts were held to have been made for educational purposes and the exemption claimed under section 5(xii) was allowed to the extent claimed.

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