Educational gifts exemption depends on the proportion fairly attributable to a child's education, not on collateral family motives.

Gifts made for a child's education qualify for exemption only to the extent that education is a real object of the gift and the allowance is reasonable in the circumstances under section 5(1)(xii) of the Gift-tax Act, 1958. Collateral affection or other mixed motives do not by themselves destroy the educational character, but the exemption must be limited to the proportion fairly attributable to education. On the facts, a 50:50 allocation was treated as reasonable for the son's gifts, while the exemption already allowed for the daughter's gifts was upheld because the educational element was smaller but still established.

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Issues: Whether the gifts made for the education of the assessee's children qualified for exemption under section 5(1)(xii) of the Gift-tax Act, 1958, and, if so, to what extent the exemption was reasonable.

Analysis: The exemption under section 5(1)(xii) applies to gifts made for the education of children, to the extent the amount is reasonable in the circumstances. The presence of affection or other collateral considerations does not by itself convert the transaction into one wholly outside the educational purpose, but the document must still show the extent to which education was a real object of the gift. For the son's gifts, the record disclosed only two practical objects, namely education and a general residual purpose, so the earlier 1/3 allocation was found too low and a 50:50 ratio was held reasonable. For the daughter's gifts, the educational element was comparatively smaller, and the allocation already adopted was upheld as reasonable.

Conclusion: The assessee was entitled to a larger exemption in respect of the gifts to the son, while the exemption allowed for the gifts to the daughter was sustained.

Ratio Decidendi: For exemption under section 5(1)(xii) of the Gift-tax Act, 1958, the decisive question is the extent to which the gift is proved to be for the education of children and is reasonable in the circumstances; collateral motives do not necessarily negate the educational character, but the exemption must be confined to the proportion fairly attributable to that purpose.

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