The expression "on the occasion of the marriage" under section 5(1)(vii) of the Gift-tax Act, 1958, should not be given any restricted meaning and if the gift made was associated with the event of the marriage or if the reason for the gift or the immediate cause thereof was the marriage, it would be covered by the said expression.

N.V. BALASUBRAMANIAN J.

The following two questions of law have been referred to us for the opinion of this court at the instance of the assessee in respect of the assessment year 1976-77, as directed by this court in judgment dated July 29, 1985, in T.C.P. No. 11 of 1985,

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the gifts of Rs. 20, 000 to Sri A. Venkatesan and Rs. 10, 000 to Sri R. Prabhu are not eligible for exemption under section 5(1)(xiii) or section 5(1)(xiv) of the Gift-tax Act, 1958 ? and

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the gift made to the assessee's daughter is not exempt under section 5(1)(vii) of the Gift-tax Act, 1958 ?"

The assessee is an individual who carried on the business of automobile workshop at Salem with a branch workshop known as "Koti Engineering Works". During the assessment year, 1976-77, the assessee made certain gifts, viz., machinery valued at Rs. 65, 721 to his brother, A. Venkatesan, who was an experienced automobile mechanic and who had been in employment of the assessee since 1960. The donee had also been receiving salary but he was not in receipt of any other benefits. During the assessment year, viz., 1976-77, the said A. Venkatesan left the assessee's employment and set up an independent business. The assessee made the gift of machinery worth Rs. 65, 721 to A. Venkatesan and claimed exemption to the extent of Rs. 20, 000 (rupees twenty thousand only) out of the gift made under the provisions of section 5(1)(xiii) or alternatively under section 5(1)(xiv) of the Act.

Another gift that was made by the assessee in favour of his son, R. Prabhu, who was also the employee of the assessee. The said R. Prabhu was managing the branch workshop styled "Koti Engineering Workshop". He was getting monthly salary and he was not entitled to any other benefits. The said R. Prabhu also left the assessee's employment and he had also set up a separate business. The assessee made a gift of certain machinery of the value of Rs. 75, 345 to the said R. Prabhu and claimed exemption of Rs. 10, 000 under section 5(1)(xiii) or 5(1)(xiv) of the ActThe Gift-tax Officer rejected both claims of the exemption of Rs. 20, 000 and Rs. 10, 000 on the ground that both A. Venkatesan and R. Prabhu were paid monthly salary for the services rendered by them and that, therefore, the claim of the assessee was untenable.

The assessee preferred an appeal against the order of the Gift-tax Officer. The Commissioner of Income-tax (Appeals) has found that in so far as A. Venkatesan is concerned, he had his training as an automobile apprentice and he was employed in Simpson and Company Ltd. He thereafter joined the assessee's workshop some time during the previous year relevant to the assessment in the year 1961-62 and the quantum of remuneration payable to Sri Venkatesan in the assessment of the assessee came up for consideration in an appeal filed by the assessee before the Income-tax Appellate Tribunal for the assessment year 1964-65. The Tribunal held that the payment of annual salary of Rs. 9, 000 to Sri A. Venkatesan who happened to be a skilled mechanic could not be taken as unreasonable. It was also found that the said A. Venkatesan was employed only up to the assessment year 1975-76 and he was getting Rs. 11, 750 and taking into consideration the number of years of service put in by the said A. Venkatesan and also taking into consideration that the said A. Venkatesan did not have any other benefit, like provident fund, the Appellate Assistant Commissioner has held that the assessee was entitled to claim deduction of a sum of Rs. 20, 000 under section 5(1)(xiii) of the Act.

In so far as Prabhu is concerned, it was found that he has studied up to Pre-University course and he was managing a branch workshop and he was also getting monthly salary. He was an employee of the assessee up to