Per Shri P. S. Dhillon, Judicial Member - The department has preferred this appeal against the order dated 10-12-1982 of Shri T. G. Nair, the AAC, who allowed the appeal against the order dated 31-1-1981 of Shri M. R. Raman, the second GTO, passed for the assessment year 1979-80.
2. The only issue in this appeal is that a gift given to the daughter at the time of her betrothal is gift to be exempted under section 5(1) (vii) of the Gift-tax Act, 1958 (the Act). The GTO took the view that gift of jewellery to the unmarried daughter for the purpose of her marriage on her betrothal is not at all gift on marriage. Since the transfer has not been made at the time of marriage, hence, premature. Accordingly, he disallowed the exemption at Rs. 10,000 out of the claim of Rs. 70,000 said to gifted on marriage to the daughter of the assessee.
3. In appeal, the AAC took the view that section 5(1) (vii) says that the gift on the occasion of marriage of relative does not mean at the time of marriage and, therefore, it is ridiculous to insist that gift should be given only at the time of marriage. He further viewed that when gift was made in connection with the marriage, it would be made on the occasion of the marriage. Therefore, the AAC took the view that the gift in dispute amounting to Rs. 10,000 at the time of betrothal could not be held to not the subject of section 5(1) (vii). Hence, the assessee is also entitled to exemption qua this amount of gift. Accordingly, he deleted the addition of Rs. 10,000 made by the GTO.
4. In appeal before us, the learned departmental representative contends that any gift made before the after the day of marriage is not at all the gift for the purpose of exemption under section 5(1) (vii). He further contends that no marriage has been celebrated so far. Reliance is placed on the decisions in the cases of CGT v. M. S. Rao : 102ITR308(Patna) and CGT v. Badur Thippaiah : 103ITR189(AP) and also the order of the WTO.
5. On the other hand, the learned counsel for the assessee contends that the gift on betrothal in dispute is for purpose of marriage and, therefore, it is part and parcel of marriage, hence, the exemption under section 5(1) (vii) is allowable. The AAC allowed it, therefore, his order calls for no interference. Reliance placed on CIT v. Mahalakshmi Textile Mills Ltd. : 66ITR710(SC) , Raza Buland Sugar Co. Ltd. v. CIT : 102ITR451(All) , N. P. Saraswathi Ammal v. CIT : 138ITR19(Mad) Smt. Kamala Devi v. Bachulal Gupta : 1SCR452 and Devchand C. Shah v. CET : 78ITR534(KAR) . In nutshell, the contention of the learned counsel for the assessee is that betrothal of the daughter is a step for marriage and, therefore, the gift in dispute of the value of Rs. 10,000 is the subject-matter of section 5(1) (vii).
6. We have heard the parties and have gone through the record. We are of the opinion that the appeal of the revenue is to be allowed. The reasons are that in allowing the claim of the assessee, the Tribunal is to allow if such claim is allowed under the provisions of the Act relying on which the claim is made. The claim of the assessee is under section 5(1) (vii) which is reproduced hereinafter for ready reference :
'(vii) to any relative dependent upon him for support and maintenance, on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative;'
A bare reading of section shows that the gifts made to the daughter are the subject-matter of section 5(1) (vii) if they are made on the occasion of the marriage. Thus, the specific provision of the section of the Act leaves no power of discretion with the income-tax authorities to take a view for taking the betrothal as part and parcel of the marriage. Marriage and betrothal are two different institutions. Betrothal no doubt is a step to marriage but it is merely a mean to an end. Betrothal is a mean while marriage is an end. Therefore, a mean is never an end and as such it cannot be held that betrothal is marriage. Furthermore, if there is betrothal, then there is every likelihood that there may not be a marriage as either party is at liberty not to perform the marriage if after the betrothal either side has come to know any defect in either party (in boy or girl). Furthermore, for the purpose of marriage, certain ceremonies are to be performed according to the custom and religion of the parties and if these are not there then the marriage is not there. Under the Civil Marriage Act, the marriage is to be registered under the procedure prescribed and established therein and if the marriage is not registered accordingly, then the marriage is not there. There betrothal is nothing else than one of the procedures to marriage (part of the whole). Therefore, no doubt it is a step but a step part cannot become the whole. A part of the whole, if separate, is part and not at all whole. In this case, as yet the marriage is not celebrated. Therefore, on merits, the assessee has no claim under section 5(1) (vii). The interpretation of section 5(1) (vii) came before their Lordships of the Patna High Court in the case of M. S. Rao (supra) where their Lordships held that the gift to the daughter at the time of marriage is the gift which is given on the day of the marriage and not after the marriage and observed as under :
'... That (i) there was only a promise made by the assessee on the occasion of the marriage of his daughter to make a gift of land to her in future. This could not be held in the eye of law to be a gift to the daughter-even an oral gift-on the occasion of her marriage. Section 5(1) (vii) was, therefore, not applicable to the gift in favour of the assessees daughter.' (p. 309)
In the case of the Budur Thippaiah (supra), their Lordships of the Andhra Pradesh High Court on interpreting the provisions of section 5(1) (vii) also held that the gift which is made on the occasion of the marriage is the subject-matter of section 5(1) (vii) and not the gift which is made otherwise observing as under :
'... That the words to any relative dependent upon him for support and maintenance is not distinct and separate from the other part on the occasion of the marriage of the relative in 5(1) (vii) of the Gift-tax Act. The comma occurring after the words to any relative dependent upon him for support and maintenance has no significance. Hence, any gift, in order to come within the purview of the exemption provided under section 5(1) (vii), must be made to a relative dependent upon the assessee for support and maintenance and on the occasion of the marriage of the relative.' (p. 190)
Thus, from the decisions of these Honble High Courts, there is no doubt in our mind to hold that the AAC has committed an error in law and facts. Hence, his order is liable to be set aside while the WTO has acted highly and, therefore, his order is liable to restored. Hence, we set aside the order of the AAC.
7. The decision relied upon by the learned counsel and cited above are of no help to the assessee as these are all on the subject of legal necessity and not at all on the subject of exemption for gifts under section 5(1) (vii). Therefore, we deem it proper to say that the cases relied on by the learned counsel for the assessee are distinguishable. Accordingly, we hold that for application and interpretation of specific provisions of specific Act and its sections are to be taken as interpreted by the Honble High Court and the Supreme Court under such Acts. Hence, we hold that in deciding the issue involved over here, we are bound to follow the decision of the Honble Patna High Court in M. S. Raos case (supra) and the Andhra Pradesh High Court decision in Budur Thippaiahs case (supra). Therefore, following these with respect, we hold that the exemption is to be granted for the value of the gifts which were gifted to the daughters on the occasion of their marriage relating to the marriage, namely, betrothal, etc., and not before and after the occasion of the marriage. Hence, if a gift is made at the time of betrothal or after the marriage in honors of the custom prevailed among the parties to the marriages, then on the value of such gift, no exemption under section 5(1) (vii) is to be allowed. Accordingly, on these reasons and discussions, we set aside the order of the AAC and restore that the GTO on following the aforesaid decision.
8. In the result, the appeal is allowed.