Law:

Section:

Section 2(xii) of the Gift-tax Act, 1958 - Gift - Whether half of property settled by assessee, who was only surviving coparcener of family, in favour of his one married and another unmarried daughters would amount to gift and was, therefore, exigible to gift-tax - Held, no Facts The assessee, who was a sole surviving coparcener, executed a partition deed under which he settled his half of the property in favour of his two daughters of whom one was married and another was unmarried. In the relevant assessment year, he filed his nil return for gift-tax. The GTO, however, held that the married daughter did not have any right on property and unmarried daughter had only claim for maintenance. He, therefore, brought the settled property to gift-tax. On appeal, the Tribunal, however, held that the transaction was in the nature of family settlement and was not a transfer or alienation and, therefore, the question to pay gift-tax did not arise. On reference: Held It is now settled legal position that under the Hindu Adoption and Maintenance Act, 1956, as well as the general Hindu law, the obligation of the father to maintain his unmarried daughters as well as married daughter so long as the daughter is unable to maintain herself from the opulent family, viz., to which she was given, is transformed into a legal obligation and thereby the need to prove the existence of a custom in a particular caste or community is obviated. Thus, giving property to an unmarried daughter as incident to the maintenance is a legal obligation cast on the father or any person receiving the property of the father except purchaser for valuable consideration without notice of the said right of the daughter. Equally giving reasonable property at the time of the marriage or subsequently in the discharge of that legal obligation, is not, thereby, a voluntary gift made by the father but is in compliance of his legal obligation. However, it is undoubtedly true that the reasonableness of the property settled upon a daughter, married or unmarried, or number of daughters, as the case may be, is to be adjudged in the light of the facts and circumstances of a given case, the totality of the property held…

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