Spouse gift exemption under Gift-tax law cannot be expanded by adding a time limit not found in the statute.

Section 5(3) of the Gift-tax Act, 1958 was construed according to its plain language: a later gift by a spouse is caught if it is made out of property earlier received under section 5(1)(viii). The Court rejected reading a further temporal restriction into the exemption provision, holding that the yearly scheme of the Act did not justify adding words not found in the text. On that construction, the later gift satisfied the statutory conditions for taxation and the spouse exemption was unavailable.

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Issues: Whether section 5(3) of the Gift-tax Act, 1958 applied to a gift made by a spouse out of property earlier received by that spouse under clause (viii) of section 5(1), and whether such later gift was liable to gift-tax.

Analysis: Section 5(3) was construed by its plain language. The provision asks only whether there was a gift by a spouse and whether that gift was made out of property received by that spouse as falling within section 5(1)(viii). The Court rejected the attempt to read into the provision a limitation confining the earlier exempt gift to the relevant previous year, holding that such a reading would amount to rewriting the section. The Act's yearly scheme did not justify adding words to an unambiguous exemption provision. On the facts, the later gift was made out of property earlier obtained under the spouse exemption, so the statutory conditions of section 5(3) were satisfied.

Conclusion: Section 5(3) applied, the exemption under section 5(1)(viii) was not available for the later gift, and the gift was taxable. The answer was in the affirmative, against the assessee and in favour of the Revenue.

Ratio Decidendi: A spouse's later gift made out of property earlier received under the spouse exemption becomes taxable under section 5(3) of the Gift-tax Act, 1958, and a court cannot add a temporal limitation not found in the statutory text.

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