Per Shri N. Krishnamurthy, Judicial Member - This appeal by the assessee is directed against the order dated 19-5-1987 of the Appellate Assistant Commissioner of Gift-tax, Madras relating to the assessment year 1978-79.

2. The assessee is a Hindu and an individual by status. On the occasion of the, marriage of his daughter on 23-1-1978, the assessee gave certain gold ornaments studded with diamonds, silver articles and cash of Rs. 16,159 the aggregate value of all these amounting to Rs. 1,71,827. In his gift-tax return for the assessment year 1978-79 the assessee claimed that as a father he is under an obligation to get his daughter married, that he belongs to Nagarthar community and according to the custom of this community, presents are made to the daughter at the time of marriage and consequently the entire amount presented to the daughter is exempt from gift-tax. However, the Gift-tax Officer gave exemption of Rs. 10,000 and Rs. 5,000 under section 5(1) and 5(2) respectively and treated the balance amount of Rs. 1,52,256 as gift and subjected the same to gift-tax.

3. Aggrieved, the assessee preferred an appeal to the Appellate Asstt. Commissioner. Before the AAC it was submitted by the authorised representative of the assessee that it was the imperative duty and moral obligation of the father to maintain his unmarried daughter and in pursuance of which if the father provides a reasonable amount in the form of jewellery, silver articles, etc., towards the expenses of his daughter’s marriage, such an amount cannot be considered as a gift since there is consideration in the form of discharge of a legal obligation of the father. It was, there fore, contended, that the transaction in question would not come within the meaning of, ‘gift’ occurring in sec. 2(xii) of the Gift-tax, Act and consequently the same is not exigible to gift-tax. In support of this, reliance was placed on the decision of the Andhra Pradesh High Court in CGT v. Ch. Chandrasekhara Reddy [1976] 105 ITR 849 ; and the decision of the Madras High Court in CGT v. M. Radhakrishna Gade Rao [1983] 143 ITR 260. The AAC dismissed the appeal of the assessee observing that the aforementioned decisions dealt with the gifts made out of joint family properties, that the karta of a Hindu joint family is under a legal obligation to defray the marriage expenses of his daughter and that since the assessee is an individual having self acquired property, the ratio of the aforementioned decisions does not apply to the present case.

4. The present appeal before us is against the aforementioned order of the AAC. The learned counsel for the assessee submitted that a Hindu father is under a legal and moral obligation to get his daughter married by defraying the expenses therefor. It is also submitted that the assessee belongs to Nagarthar community, that in accordance with the custom and tradition of this community, gold ornaments, silverware and cash are presented to the daughter on the occasion of her marriage. As this present was made in pursuance of an obligation imposed on the father and also in accordance with the custom prevailing in that community, it is contended that the Gift-tax Officer was not justified in treating this transaction as a gift and subjecting the same to gift-tax. In support of this, reliance was placed on the following decisions :

(i) Ch. Chandrasekhara Reddy’s case (supra), (ii) M. Radhakrishna Gade Rao’s case (supra), (iii) CGT v. Basant Kumar Aditya Vikram Birla [1982] 137 ITR 72 (Cal.), and (iv) CGT v. Bandlamudi Subbaiah [1980] 123 ITR 509 (AP).

Against this, the learned departmental representative submitted that the assessee is an individual by status having self- acquired property. As such, he is not under a legal obligation to incur the marriage expenses of his daughter and if he chosen to do so, it is a voluntary act devoid of any consideration and hence the same would amount to a gift within the meaning of section, 2(xii) of the Gift-tax Act