A gift to a daughter-in-law, even subsequent to the marriage, cannot be said to be a gift to a relative dependent for support and maintenance on the occasion of marriage, and therefore, is not eligible for exemption u/s 5(1)(vii) of the Gift-tax Act, 1958.

JUDGMENT :

A. Pasayat, J. - These two references are inter-related, and are disposed of by this common judgment.

2. Accepting the prayer of the Revenue for reference, the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack (in short, " the Tribunal"), has referred the following question for the opinion of this court u/s 26(1) of the Gift-tax Act, 1958 (hereinafter referred to as "the Act") :

" Whether the married daughters-in-law of a karta (an assessee) of a Hindu undivided family would be relatives dependent upon him and whether gifts made by their father-in-law immediately after their marriage, are eligible for exemption u/s 5(1)(vii) of the Gift-tax Act, 1958 ?",

3. The assessment years involved are 1980-81 and 1981-82.

4. The background facts as culled out from the statement of case drawn up by the Tribunal are that Sri K. B. B. Subudhi of Berhampur in the district of Ganjam (hereinafter referred to as " the assessee") as karta of the Hindu undivided family filed two returns of gift on March 31, 1982, for the assessment years 1980-81 and 1981-82 disclosing a total gift of Rs. 47,172 and Rs. 61,612 and a taxable gift of Rs. 32,172 and Rs. 46,612, respectively. According to the returns during the assessment year 1980-81, on June 1, 1979, the Hindu undivided family gifted gold ornaments and silver ornaments to Smt. K. Girija Kumari, wife of Sri K. Hariprasad Subudhi. Besides the basic exemption of Rs. 5,000 a sum of Rs. 10,000 was claimed as exemption on the ground that the gift was made to the donee who is the eldest daughter-in-law on the occasion of her marriage. Similarly, during the assessment year 1981-82, on November 26, 1980, the Hindu undivided family gifted gold ornaments and silver ornaments to Smt. K. Sujata, wife of Sri K. Ravi Prasad Subudhi, who is also a daughter-in-law and similar exemption of Rs. 10,000 was claimed. The Assessing Officer did not accept the claim. It was observed that exemption is admissible only in respect of any relative dependent upon the assessee for support and maintenance, and the gift should be on the occasion of the marriage of the said relative. A finding was recorded that the daughters-in-law were not depending on the assessee on the respective dates of marriage. The observations of the Assessing Officer were assailed in appeal before the Appellate Assistant Commissioner of Income Tax. The said authority was of the view that the exemption is in respect of the marriage of a relative dependent for support and maintenance. It was observed that, in Hindu marriages, relatives of both groom and bride make gifts and, therefore, the gifts were made at the time of the marriage. So far as the term " dependent" is concerned, it was observed that the term would essentially mean that the dependence should be for limited purposes of support and maintenance, and, in the case at hand, the assessee being a Hindu undivided family, the daughters-in-law have to depend on it for support and maintenance. Therefore, the claims were allowed. The Revenue carried the matter in appeals before the Tribunal. In deciding the appeals, the Tribunal was of the view that the expression " occasion" did not relate only to the date of marriage. The expression " dependent" in the absence of a statutory definition was wide enough to include daughters-in-law. Reference is made to a circular issued by the Central Board of Direct Taxes dated February 27, 1959, in that context. With the aforesaid conclusions, the first appellate order was affirmed and the Revenue's appeals were dismissed. A reference to this court was sought for by the Revenue which was accepted by the Tribunal as indicated above.

5. According to Mr. Ray, learned counsel for the Revenue, the basic ingredients required to be satisfied before availing of the exemption did not factually exist and, therefore, the conclusions of the Tribunal are not legally tenable. Learned counsel for the assessee, on the other hand, supported the conclusions of the first appellate