Law: Gift Tax Act, 1958

Section: 5(1)(vi)

Law: Gift Tax Act, 1958

Section: 5(1)(vi)

Section 5(1)(vi) of the Gift-tax Act, 1958 - Exemption - In respect of certain gifts - Assessment year 1958-59 - Whether expression 'charitable purpose' is a generic terms and is wide enough to included both 'charitable purpose' as well as public 'religious purpose' - Held, yes - Whether, thus, where a person makes a gift of a property for public religious purpose, it is entitled for exemption under section 5(1)(vi) - Held, yes - Whether where in a property settled in favour of charitable trust, settlor's wife was given right to residence for her life-time, and on her death said property would be in possession of trust, it would be a trust property and gift was for charitable purpose - Held, yes FACTS On 18-1-1956, the assessee settled certain agricultural lands in a trust. As provided in the deed of settlement, the income from the settled properties were to be utilised for the upkeep and maintenance of the public temples; for the expenses of the repair and replacement of any ornaments and utensils and other articles required for the said temples and performance of pujas, festivals, etc. In respect of a portion of a settled property where the settlors wife was residing, it was directed that she would reside therefor her lifetime and the building would be maintained properly. The GTO held that the gifts were for religious purpose and not for charitable purpose, and, hence, the assessee was not entitled to exemption. On appeal the AAC, though provided some relief, affirmed the order of the GTO in main. On further appeal, however, the Tribunal came to the conclusion that the expression "charitable purpose" in section 5(1)(vi) includes "religious purposes". The Tribunal further held that the building in a portion of which the settlor's wife was residing was a trust property and the direction given was only for the purpose of maintenance of the trust property. The object was, therefore, a charitable one. The Tribunal therefore, granted exemption to the assessee. On reference : HELD The expression 'charitable purpose' is a generic term in law and has assumed a definite meaning in India law. The expression is wide enough to included both 'charitable purpose' as well…

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