Spouse exemption under Gift-tax law applies where a HUF member gifts joint family property as husband, not as karta.

A gift of joint Hindu family property to the donor's wife can qualify for the spouse exemption under section 5(1)(viii) of the Gift-tax Act, 1958 where the deed shows the transfer was made by the member in his individual capacity as husband. The court treated the decisive factor as the capacity in which the transfer was effected and the tenor of the gift deed, not the mere fact that the donor was a karta. Because the Act defines "person" to include a Hindu undivided family, the spouse exemption was not read narrowly to exclude such a gift. The gift was therefore exempt, and the reference was answered in favour of the assessee.

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Issues: Whether a gift of joint Hindu family property made by a karta to his wife is exempt under section 5(1)(viii) of the Gift-tax Act, 1958.

Analysis: The exemption for gifts to a spouse was held to depend on the capacity in which the transfer was made and on the tenor of the gift deed, not merely on the fact that the donor was a karta of a Hindu undivided family. Since the Act defines "person" to include a Hindu undivided family, there was no warrant to read down the spouse exemption so as to exclude a gift made by an individual member out of joint family property. The deed showed the donor acting as husband and not as the Hindu undivided family.

Conclusion: The gift was exempt under section 5(1)(viii), and the answer to the referred question was in the affirmative, in favour of the assessee.

Ratio Decidendi: Where the deed of gift shows that a member of a Hindu undivided family made the transfer in his individual capacity as husband, a gift of joint family property to his wife falls within the spouse exemption under section 5(1)(viii) of the Gift-tax Act, 1958.

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