1. This appeal by the assessee arises out of gift-tax proceedings relevant to the assessment year 1979-80. The assessee is a HUF consisting of the karta Shri S. Raghurami Reddy, his wife and two daughters. One of the two daughters, Smt. Dharanija, got married on 18-5-1978. On that very date the assessee made a cash gift of Rs. 50,000 to the bride. A nil return was filed for gift-tax purposes and the contention was that the assessee belonged to a well-to-do family possessing both movable and immovable properties and in addition the family was also a partner in two firms. The IAC who made the assess-ment stated that this fact was not disputed. The contention of the assessee was that the amount of Rs. 50,000 presented on the occasion of the marriage was not legally a gift and, hence, was not liable to gift-tax. The assessee relied on two decisions in support of this proposition, both of the Andhra Pradesh High Court. The first decision is that of CGT v. Bandlamudi Subbaiah  123 ITR 509 (AP) and the second being that of the same High Court in CGT v. Ch.
Chandrasekhara Reddy  105 ITR 849 (AP).
2. The IAC stated that neither of the decisions had been accepted by the revenue. According to him the legal obligation under Hindu law to provide for daughters' maintenance could not be taken as adequate consideration and further he stated [that] under the Gift-tax Act, 1958 ('the Act'), consideration had to be in money or money's worth. Where there was a transfer of property otherwise than for consideration in money or money's worth, according to the IAC, there would be a gift.
He, therefore, came to the conclusion that in the present case there was a gift of Rs. 50,000. In concluding the IAC observed that the present case was covered by facts in the case of Chandrasekhara Reddy (supra) but with due respect to the High Court's decision since the same had not been accepted by the revenue and in view of the time limit for completion of the gift-tax proceedings, the assessment was being completed on the basis that the gift was taxable. He, however, went on to state that the assessee was entitled to exemption under Section 5(1)(vii) of the Act of Rs. 10,000 and the basic exemption under Section 5(2) of Rs. 5,000.
3. The assessee appealed to the Commissioner (Appeals). The Commissioner (Appeals) stated that in the present case the amount of Rs. 50,000 was given on the very day of marriage unlike in the case decided by the Andhra Pradesh High Court in the case of Chandrasekhara Reddy (supra). There he stated that the conveyance of land took place some months before the actual marriage. According to Commissioner (Appeals) the payment of Rs. 50,000 in the present case was a gift per se and there was no evidence placed before the IAC to show that the assessee's obligation to provide maintenance, which in the context of the case should be taken to include giving gifts to the daughter as an incident to marriage, was discharged. According to the Commissioner (Appeals) the facts were distinguishable from the facts in Chandrasekhara Reddy's case (supra) and, therefore, he upheld the assessment.
4. Before us the learned counsel relied on the statement of facts filed before the Commissioner (Appeals). It was stated that for the assessment year 1978-79 the wealth after adding back the exemptions claimed, of the family, came to Rs. 2.84 lakhs. He stated that the total expenditure on the marriage came to Rs. 65,000 which included Rs. 50,000 given on the occasion of marriage and Rs. 15,000 spent in connection with other marriage expenditure. This he stated was a reasonable expenditure and among the Reddy community of Nellore, there was a custom and usage to give a presentation on the occasion of the daughter's marriage and, therefore, relying on the two decisions of the Andhra Pradesh High Court in the cases of Bandlamudi Subbaiah and Chandrasekhara Reddy (supra), he submitted that no gift-tax should have been levied on the payment of cash of Rs. 50,000 to the daughter.
5. The learned departmental representative, on the other hand, stressed on the fact that in the present case the payment of Rs. 50,000 was made on 18-5-1978 which was the wedding day. According to him that was clearly a cash gift on the occasion of marriage. Section 5(1)(vii), according to the learned departmental representative, clearly covered such contingencies and any payment by way of gift to a relative dependent upon an assessee for support and maintenance, on the occasion of the marriage was exempt only up to a maximum of Rs. 10,000 in value.
He, therefore, stated that the exemption of Rs. 10,000 having already been allowed by the IAC, no further exemption could be given. The learned departmental representative also referred to the facts in the case of Bandlamudi Subbaiah (supra) and stated that the High Court in that case had drawn a distinction between the gifts to the married daughters and to unmarried daughters and the gifts to married daughters, no doubt given effect through a partition, were held to be hit by the ceiling under Section 5(1)(vii). He, therefore, pleaded that the orders of the authorities below did not call for interference.
6. In reply, the learned counsel for the assessee submitted that the term 'relative' under Section 5(1)(vz7) would not include a daughter whom a karta of the HUF was bound to maintain.
7. We have carefully considered the rival submissions. Section 5(1)(vii) is couched in general terms and we need not enter into any dissertation on the scope of the term 'relative' for, in our view, a daughter or a son is related to the parent by birth and is one of the closest forms of relationship known. A daughter is certainly a relative within the meaning of Section 5(1 )(vii).
8. A proper approach to a case like this is to determine whether the transaction in question is a gift or not. If the transaction falls outside the purview of the definition of gift as occurring in Section 2(xii) of the Act read with Section 2(xiv), then the transaction would not be exigible to levy of gift-tax under the provisions of the Act.
If, on the other hand, the transaction falls within the purview of the definition then gift-tax will be leviable subject to such exemptions, as the Act provides.
9. In the case of Chandrasekhara Reddy (supra) the betrothal took place on 15-10-1966 and the marriage took place on 1-3-1967. The transfer of 10 acres 54 cents of land took place on 1-1-1967, i.e., in between the betrothal and the marriage. The aggregate value of the property transferred was Rs. 63,000. It was contended that there was no gift since it was a discharge of obligation for maintenance of an unmarried daughter. The High Court of Andhra Pradesh had observed during the course of the judgment as under : (ii) in the case of an unmarried daughter, also the reasonable expenses of and incident to her marriage.
It is nobody's case that the transfer in question was effected for the purpose of expenses of the marriage of the assessee's daughter and the whole question that has to be considered in the present case is whether the transfer or conveyance by the assessee to his unmarried daughter in anticipation of the marriage can be said to be by way of reasonable expenses incident to her marriage. The learned commentator of Hindu law, Mr. N.R. Raghavachariar, in his commentary on Hindu Law, 5th edition, states at page 1103 : The words 'incident to marriage' are used to indicate the necessity for inclusion in the expenses payable for the marriage of an unmarried daughter not only the actual expenses of her marriage but also the expenses incidental to the marriage, namely, presents at the marriage and other necessary expenses that have to be customarily incurred both before and after the actual marriage such as the expenses of the betrothal function and the nuptials that may take place after the marriage. (p. 852) From the aforesaid observations it is clear that even presents at the time of marriage would fall within the purview of expenses on maintenance, Thereafter, there were also the following observations : ...Therefore, in order to find out whether conveyance of land on the occasion of the daughter's marriage can be said to be incident to the marriage, it must be found whether the usual custom or practice was to convey land on the occasion of a daughter's marriage so far as this particular community of the assessee or the family of the assessee was concerned. (p. 853) According to the aforesaid observations of the Andhra Pradesh, High Court, which are binding on us, merely because the presentation is made on the occasion of the marriage, that by itself would not take the presentation outside the purview of expenditure on maintenance and marriage, which a Hindu father is obliged to incur. Incurring of such expenditure, if it is for maintenance and marriage of an unmarried daughter, would not be a voluntary transfer of property and, therefore, would fall outside the purview of the definition of term gift' in Section 2(xii) read with Section 2(xxiv).
10. A case had come up before the Calcutta High Court in the case of CGT v. Basant Kumar Aditya Vikram Birla  137 ITR 72. The decision of the Andhra Pradesh High Court in the case of Chandrasekhara Reddy (supra) was also considered by the Calcutta High Court as well as various other decisions. In that case at the time of marriage of the daughter gifts were made of :Jewellery worth 47,000Cash 11,000Fridge 9,744 _________ The aggregate gifts made were of Rs. 1,33,744 but the amount of Rs. 67,744 was held to be not liable to gift-tax on the ground that such expenditure represented really marriage expenses. There is an exhaustive review of the case law on the point by the Calcutta High Court in this judgment.
11. In the case of Bandlamudi Subbaiah (supra) decided by the Andhra Pradesh High Court, there were agricultural lands of the value of Rs. 29,400 allotted to three married daughters. The Tribunal proceeded on the basis that the provisions of Section 5(1)(vii) applied and, therefore, such gifts were exempt. Regarding gift to unmarried daughters aggregating to Rs. 30,625 the Tribunal held that they were not exigible to gift-tax at all since the father was bound to maintain the unmarried daughters. The observations of the Hon'ble High Court regarding the treatment of gifts to three married daughters in the case of Bandlamudi Subbaiah are as under : The first question refers to the properties allotted to the three married daughters. Clause (vii) of Section 5(1) of the Gift-tax Act exempts from gift-tax, gifts made to any relative dependent upon the donor for support and maintenance on the occasion of the marriage of the relative, subject to a maximum of Rs. 10,000 in value in respect of the marriage of each such relative. It is not in dispute that the property allotted to each one of the married daughters is below the value of Rs. 10,000. The partition deed purported to have made presents of lands to the three married daughters. Therefore, the Tribunal directed the lower authorities to ascertain whether these gifts of lands ware proposed to be made on the occasions of the marriages of the three daughters. Undoubtedly, this view is quite correct. It is not unoften that a HUF announces gift of certain properties, generally lands in an agricultural State like Andhra Pradesh, on the occasion of the marriage of the daughter. The gift deed or settlement deed might not have been executed simultaneously with the marriage or the announcement. Later when the family itself splits up on account of partition, what had been agreed upon or announced would be reduced to writing in the partition deed. If really there was an arrangement on the occasion of the marriage of the daughter to give her some property, certainly it would come within the scope of Clause (vii) of Section 5(1) of the Gift-tax Act, even if the arrangement was reduced to writing much later either in the form of a partition deed or in the form of a settlement or gift deed. This is precisely the view taken by the Tribunal. That is why it directed the lower authorities to ascertain whether, on the occasion of the marriages of the three daughters, the lands which were sought to be given to them, were gifted to the daughters. This is essentially a question of fact. Therefore, we see no justification in calling for reference of the first question.
(pp. 511-12) The direction of the Tribunal in that case was that the authorities below should ascertain whether the lands sought to be given to the three married daughters on the occasion of marriage were gifts to the daughters. It cannot be in these circumstances stated that any amount which may be given to a daughter on the day of marriage would invariably be a gift. What has to be decided is whether what is given is a gift, that is, voluntary payment, or, the payment represents nothing but the discharge of a legal obligation. If it is the former, the provisions of Section 5(1)(vii) would be attracted and if it is the latter, then no gift-tax at all would be exigible.
12. The submission of the learned departmental representative was that the judgment of the Andhra Pradesh High Court in Bandlamudi Subbaiah's case (supra) comprised of two limbs, viz. : (a) if the gift was made on the occasion of the marriage to a daughter, the provisions of Section 5(1)(vz7) would apply and gift in excess of Rs. 10,000 would be taxable, and (b) if the gift is not on the occasion of marriage but is made to an unmarried daughter, it ceases to be a gift because the HUF is bound to maintain an unmarried daughter.
13. The relevant observations of the High Court in Bandlamudi Subbaiah's case (supra) have been set out by us in full. If the payment on the date of marriage is a gift, certainly the provisions of Section 5(1)(vii) would apply. But what is to be examined is whether the payment made on the date of marriage, or earlier, or even shortly thereafter, is really a gift or is the discharge of a legal obligation.
This we are required to ascertain having regard to the ratio of the decisions in Bandlamudi Subbaiah's case (supra) as well as in the case of Chandrasekhara Reddy (supra) and also that in the case of Basant Kumar Aditya Vikram Birla (supra).
14. In the case of Chandrasekhara Reddy (supra) the High Court declined to answer the question because the Tribunal had failed to consider and decide the question whether the conveyance under consideration was by way of usual provisions for the marriage of the daughter and thus incidental to the marriage in the particular family or in the particular community. In the present case also there has to be a finding whether the payment of Rs. 50,000 was by way of usual provision for the marriage of the daughter. In the case of Chandrasekhara Reddy (supra) the area of land transferred was 10.54 acres out of a total of 27 acres. The transfer was to the only daughter. The Tribunal considered it was a reasonable provision for the daughter. But the High Court was of the view that the Tribunal had failed to consider whether the transfer was by way of usual provision for marriage and thus incidental to marriages in the particular family or community. In the present case, no doubt, there is material to show that the aggregate wealth was in excess of Rs. 2 lakhs. The transfer was only of Rs. 50,000. The IAC had given a finding that the case fell within the ratio of judgment of the Andhra Pradesh High Court in the case of Chandrasekhara Reddy (supra). But as already stated in the case of Chandrasekhara Reddy (supra) the High Court had declined to answer the question with the result the Tribunal had to re-decide the issue with reference to the guidelines indicated by their Lordships. In the present case also we would, accordingly, set aside the orders of the authorities below and restore the matter to the assessing authority who would consider whether the payment of an amount of Rs. 50,000, having due regard to all attendant circumstances, could be considered to be by way of usual provision for marriage of a daughter in the particular community of the assessee. If the assessing authority comes to the conclusion that the amount was a usual provision for the marriage of the daughter then the amount in question will not be a gift and will be exempt from gift-tax. Otherwise an exemption will be available only to such extent of amount as would constitute a usual provision for marriage of a daughter in the particular community. The balance would be a gift on the occasion of the marriage of a relative and the assessee would only be entitled to exemption under Section 5(1)(vii) of up to Rs. 10,000 from the amount which is construed as a gift on the occasion of marriage. For statistical purposes the appeal is treated as allowed in part.