Dedication to a family deity is not a gift and ceases to be the donor's wealth for tax assessment.

A unilateral dedication of gold and silver ornaments as a Hindu religious endowment to a family deity was not a taxable gift, because a gift requires a transfer to a donee and the dedication was not a bilateral transfer; the Revenue therefore failed on the Gift-tax Act issue. Once the ornaments were effectively dedicated, the assessee's beneficial interest stood extinguished and the deity, as a juristic person holding property through its shebait, became the relevant holder; the ornaments could not be assessed as the assessee's wealth for wealth-tax purposes, so that part of the assessment was deleted.

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Issues: (i) Whether the dedication of gold and silver ornaments to the family deity constituted a taxable gift under the Gift-tax Act, 1958. (ii) Whether the dedicated ornaments could be treated as the assessee's wealth for wealth-tax purposes.

Issue (i): Whether the dedication of gold and silver ornaments to the family deity constituted a taxable gift under the Gift-tax Act, 1958.

Analysis: The dedication was treated as a Hindu religious endowment and not as a bilateral transfer. A gift requires transfer to a donee, whereas the dedication was a unilateral act in favour of a deity, with the property remaining with the shebait for management and not continuing as the assessee's property. On that basis, the transaction did not fall within the charging provisions relating to gift.

Conclusion: The dedication was not chargeable as a gift and the finding was against the Revenue.

Issue (ii): Whether the dedicated ornaments could be treated as the assessee's wealth for wealth-tax purposes.

Analysis: Once the property was dedicated to the family deity, the assessee's beneficial interest stood extinguished. A Hindu deity is a juristic person capable of holding property through its shebaits, and the property was therefore not owned by the assessee for wealth-tax assessment. The proper taxable unit, if any, was the deity through the shebaits.

Conclusion: The ornaments could not be assessed as the assessee's wealth and the finding was in favour of the assessee.

Final Conclusion: The Revenue's appeal failed on the gift-tax issue, while the assessee succeeded in deleting the dedicated ornaments from the wealth-tax assessment.

Ratio Decidendi: A unilateral dedication of property as a Hindu religious endowment to a deity is not a gift and, once effectively dedicated, the property ceases to be the donor's wealth for assessment purposes.

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