Betrothal gift exemption under Gift-tax law denied because marriage had not yet taken place

A gift made to a daughter at the time of her betrothal was not treated as a gift made on the occasion of her marriage for exemption under section 5(1)(vii) of the Gift-tax Act, 1958. Betrothal was regarded as a separate stage and only a step towards marriage, so the statutory exemption could not be extended before the marriage was actually celebrated. The Tribunal followed the cited High Court view that the exemption must be confined to the clear wording of the provision. The claimed exemption was therefore denied.

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Issues: Whether a gift made to a daughter at the time of her betrothal qualifies for exemption under section 5(1)(vii) of the Gift-tax Act, 1958 as a gift made on the occasion of her marriage.

Analysis: The exemption applies only to gifts made on the occasion of the marriage of a dependent relative. Betrothal is treated as a distinct stage from marriage and only a step towards it. Since the marriage had not yet been celebrated, a gift made at betrothal could not be equated with a gift made on the occasion of marriage. The Tribunal followed the view expressed in the cited High Court decisions that the statutory exemption cannot be extended beyond the clear words of the provision.

Conclusion: The gift made at betrothal was not exempt under section 5(1)(vii); the assessee was not entitled to the claimed exemption.

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