Law:

Section:

Section 5(1)(vii) of the Gift-tax Act, 1958 - Exemption-Gifts for marriage of children - Assessment year 1977-78 - Assessees made cash gifts to their daughter just before her marriage and claimed exemption under section 5(1)(vii) - Whether in absence of clear finding by Tribunal as to whether daughter who had income from lorry business was a relative dependent upon her parents for maintenance and support within meaning of section 5(1), gifts made were not eligible for exemption under section 5(1)(vii) - Held, yes Section 5(1)(xii) of the Gift-tax Act, 1958 - Exemption - Gifts for education of children - Assessment year 1977-78 - Whether assessees, husband and wife, were entitled to exemption in respect of gifts made by each of them to their daughters with intimation that they should invest money as capital in a partnership with other daughter for purpose of running lorry business and use income from such business for purpose of their education - Held, yes Facts The assessees, the husband and the wife respectively, made gifts to their three daughters in the accounting period relevant to the assessment year 1977-78. The first gift of Rs. 50,000 each to A was made just before her marriage and the other two gifts of Rs. 10,000 each were made to two other daughters who were students. The assessees claimed exemptions under sections 5(1)(vii) and 5(1)(xii). The GTO held that A had income of her own being the income from the running of a lorry and, therefore, she could not be considered to be dependent upon either parents of hers. He, therefore, disallowed the exemption claimed under section 5(1)(vii) . Regarding the other gifts of Rs. 10,000 each, the GTO held that the parents had given the gifts with intimation to the two daughters that they should invest the money as capital, in a partnership with other daughter for the purpose of running of the lorry business and use the income from such business for the purpose of their education. The GTO held that it was so done by the assessees with the intention of expanding the lorry business run by A and not meeting the donees' educational expenses. The GTO, on these grounds, disallowed the exemption claimed under section…

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