Educational institution exemption under gift-tax law upheld where prior income-tax recognition supported the donee's status.

Gift of land to an educational institution was treated as exempt under the Gift-tax Act because the donee had already been recognised in income-tax proceedings as an institution covered by section 10(22) of the Income-tax Act. Prior appellate and departmental recognition of the institution's educational character supported the claim for exemption-related treatment, and no sufficient ground was shown to disturb that finding. On that basis, the transfer was regarded as falling within the exemption for gifts to the eligible institution.

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Issues: Whether the gift of lands made to M/s Devi Educational Institution was exempt under section 5(1)(v) of the Gift-tax Act on the footing that the donee was an educational institution covered by section 10(22) of the Income-tax Act and approved for exemption-related purposes.

Analysis: The institution had already been recognised in income-tax proceedings as one to which section 10(22) of the Income-tax Act applied, and this was supported by prior appellate and departmental recognition of its educational character. On that basis, the gift was treated as falling within the exemption provision under the Gift-tax Act. The Revenue did not establish any sufficient ground to disturb the finding that the donee institution was eligible for the benefit relied upon by the assessee.

Conclusion: The gift of land was held exempt under section 5(1)(v) of the Gift-tax Act, and the Revenue's challenge failed.

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