Law:

Section:

Section 5(1)(xii) of the Gift Tax Act, 1958 - Exemption - Gift for education of children - Assessment year 1964-65 - Assessee made gift of certain property to son studying in college - Gift deed used word "Kalakshepam" - Subsequent clarification deed specifically stated that gift was made for educational needs of son also - Exemption claimed under section 5(1)(xii) was not allowed by Gift-tax Officer and AAC - Tribunal, however, understood word 'Kalakshepam' as including not only general needs of son but also his educational needs and allowed assessee's claim partly - Whether, on facts, Tribunal was right in holding that gift was made partly for education of assessee's son and was to that extent exempt from tax under section 5(1)(xii) - Held, yes FACTS The assessee made a gift of property in a town to his son who was studying in a college. The assessee claimed exemption from gift-tax on the ground that the gift was for the education of son and would, therefore, fall under section 5(1)(xii). The GTO did not accept this contention which was confirmed by the AAC. After the assessment order the assessee also executed a clarification deed specifically stating that the gift was made so that the educational need of the son may also be met. In the gift deed the statement was that the property was gifted for the son's 'Kalakshepam'. On second appeal, the Tribunal accepted the contention of the assessee that the gift was for the educational needs of the son as well. On reference : HELD The document, that is, the gift deed had used the word "Kalakshepam" which definitely and undisputedly indicated the purpose of the gift. The donor at that time was advanced in age. His son was studying in an important college in the city of Madras. The word had been understood by the Tribunal as including not only the general needs of the son, but also his educational needs. It could not therefore, be said that the meaning attributed to the word in the context in which it was used in the document and in the circumstances in which the document was executed was wrong. The reference made by the Tribunal to the clarification document did not invalidate the conclusion reached by it. The…

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