Maintenance right in family partition can amount to consideration, so a provision for the karta's wife was not a taxable gift.

A provision made to the karta's wife in a partial partition was treated as supported by consideration, not as a gratuitous transfer. The wife had a legally enforceable right to maintenance from coparcenary property, and a family allocation referable to that obligation could operate as quittance pro tanto of the maintenance claim. Because the obligation was capable of being reduced into money or money's worth, the provision did not fall within the definition of a gift under the Gift-tax Act, 1958. Accordingly, the amount was not liable to gift-tax as a taxable gift.

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Issues: Whether a provision of Rs. 50,000 made in a partial partition for the karta's wife was a gift taxable under the Gift-tax Act, 1958, or was supported by consideration as discharge of the family's maintenance obligation.

Analysis: The wife of the karta had a legally enforceable right to maintenance out of the coparcenary property, and a provision made to her in the course of partition could be treated as referable to that obligation. The amount was not paid to a stranger but to a family member whose maintenance claim could be satisfied from family assets. The obligation to maintain her was capable of reduction into money or money's worth, and the provision therefore operated as quittance pro tanto of that obligation. On that footing, the payment was not a gratuitous transfer within the meaning of section 2(xii) read with section 2(xxiv) of the Gift-tax Act, 1958.

Conclusion: The provision of Rs. 50,000 was supported by consideration in money's worth and was not a gift liable to gift-tax.

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