Maintenance transfers to minor daughters were still taxable gifts because the obligation was not consideration in money or monies worth.

Transfers of immovable property by a father to his minor daughters, made as provision for their maintenance, were treated as gifts for gift-tax purposes because the father's maintenance obligation under Hindu law and the Hindu Adoption and Maintenance Act, 1956 did not constitute consideration in money or monies worth. Although discharge of a maintenance duty may amount to valuable consideration in contract law, it does not satisfy the gift-tax definition. The transfers therefore did not fall outside the ambit of gift, and were liable to gift-tax.

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Issues: Whether transfers of immovable property made by a father to his minor daughters as provision for their maintenance constituted a gift exigible to gift-tax, or were outside the definition of gift because they were supported by consideration in money or monies worth.

Analysis: The transfers were executed as provision for the maintenance of the minor children, and the assessee had a legal obligation to maintain them under Hindu law and the Hindu Adoption and Maintenance Act, 1956. However, the relevant test under the gift-tax law was whether there was consideration in money or monies worth. A transfer made in discharge of a maintenance obligation may amount to valuable consideration in the law of contract, but it is not consideration in money or monies worth. On that basis, the deeds could not be treated as transfers for consideration so as to fall outside the definition of gift.

Conclusion: The transfers were gifts liable to gift-tax, and the Department's appeal succeeded.

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