Per Shri T. N. C. Rangarajan, Judicial Member - This appeal by the assesse is directed against the assessment to gift-tax with regard to the transfer of certain jewellery by the assessee to her daughter at the time of her marriage.
2. The assesse is an individual but a member of the HUF of which her husband M. R. Doraiswamy is the karta. The HUF consisted of the karta, his wife, two sons and two daughters and has substantial properties. The assessee had 250 sovereigns of gold jewellery received as stridhan and 31 cts. of diamonds purchased by her. When the first daughter of the family, Rajeswari, was given in marriage, the family had to arrange for giving some jewellery. The assessee parted with the jewellery in her possession and the karta Doraiswamy also purchased further jewellery of 30 sovereigns of gold and 36 cts. of diamonds valued at Rs. 87,000 and gave them to the daughter on the occasion of the marriage. In the wealth-tax assessment of the assessee, she had informed the WTO that her wealth had been reduced to that extent. Taking that as an information of a gift by the assessee to her daughter, proceedings were taken under the Gift-tax Act, 1958 (the Act) for making an assessment. Statement were filed before the GTO claiming that the jewellery given to the daughter both by the assessee and her husband represented the discharge of the obligation of the HUF to perform the marriage of the daughter and the value of the jewellery would have to be adjusted against her claims over the joint family property in case of partition. The GTO did not agree with this claim and he brought to tax the value of the jewellery transferred by the assessee as well as the value of the jewellery transferred by the HUF represented by the karta. On appeal, in the case of the HUF and AAC held that the transfer of jewellery by the karta, was in discharge of the obligation under the Hindu law and could not be regarded as a transfer without consideration and brought to tax. However, in the case of the assesse, he held that since the jewellery belonged to the assesse as her individual property and since she was not realised the value from the HUF ever since the marriage which took place in 1973, there was a taxable gift.
3. In the further appeal before us, it was contended on behalf of the assessee that the transaction was only a family arrangement of purchasing fresh jewellery, the assessee would part with her stridhan reserving her claim against HUF for reimbursement and, therefore, no taxable gift was made. On the other hand, it was contended on behalf of the revenue that there is not evidence of any such family arrangement and, therefore, the transfer of individual property without consideration was rightly taxed under the Act.
4. On consideration of the rival submission, we are of the opinion that the assesse is entitled to succeed. It is not in dispute that the jewellery in question belonged to the assessee in her individual capacity and those were given to the daughter on the occasion of the marriage. But the claim of the assesse is that it was not directly given by the assessee to the daughter as a gift. The assessee states that the jewellery was given as a part of the family arrangement to the karta of the family for performing the marriage without purchaser of fresh jewellery on the understanding that the assessee would be reimbursed the value of the jewellery while settling the accounts of the joint family. We do not see how there could be any other evidence for this statement of the assessee which itself is an evidence unless it is to be arbitrarily rejected as unbelievable. That we cannot do because it is part of human conduct that on the occasion of the marriage the jewellery in the possession of the female members of the family may be utilised to perform the marriage immediately without further purchase of jewellery and the lady who parts with that jewellery reserves her right to get reimbursement from the joint family. In fact, Courts have recognised that such reimbursement cannot be refused by the HUF - CGT v. Basant Kumar Aditya Vikram Birla : 137ITR72(Cal) . In the circumstances there is nothing to show that the transfer of the jewellery on the occasion of the marriage was made without consideration and that it amount to gift. Therefore, the gift-tax assessment has to be annulled. The appeal is allowed.