ORDER
T.A. Bukte, Judicial Member
1. The only point involved in this appeal is whether an amount of Rs. 85,001 paid by a Christian father to his daughter at the time of her marriage is a mere settlement of his legal obligation and whether the said sum is taxable as a gift.
2. We have heard the learned representative, Sri K.G. Anil Babu and the learned departmental representative, Sri Kuruvila M. George. Their arguments are taken into consideration.
3. The assessee paid a sum of Rs. 85,001 to his daughter at the time of her marriage. He did not file any gift-tax return for the assessment year 1986-87 under appeal showing the payment of Rs. 85,001 as gift. The Gift-tax Officer issued a notice under section 16(1) of the Gift-tax Act, 1958 and called upon the assessee to file a return of gift. In compliance with the notice under section 16(1) the assessee filed a ‘nil gift-tax return on 11-2-1988. The assessee pleaded before the Gift-tax Officer that the payment of Rs. 85,001 to his daughter at the time of her marriage did not constitute a gift. The assessee submitted before the Gift-tax Officer that he was under a moral obligation to maintain his daughter and such maintenance included getting the daughter married in a proper and befitting manner. He further pleaded that he has discharged his legal obligation as a father and therefore the amount of Rs. 85,001 paid to his daughter at the time of her marriage does not constitute a gift chargeable to gift-tax.
4. It appears just and proper to reproduce the order of the Gift-tax Officer which speaks for itself as follows :
“I regret I cannot agree with the views expressed by the assessee. It is true that a father is obliged to bring up his daughter properly and marry her away in a decent manner. But, the lump sum payment made to his daughter definitely constitute a gift, which can be subjected to tax as per the provisions of the Gift-tax Act. When a father marries away his daughter, it is not necessary that he should make a lump sum gift also. The daughter is entitled to her share of the properties owned by her parents. She will be receiving this share on the demise of her parents. When things are like this, there is no obligation on the part of the father to make a lump sum gift at the time of marriage. For the reasons expressed above, I hold that the gift made by the assessee at the time of marriage to his daughter can be subjected to tax.”
The learned representative of the assessee submitted that a Christian father is bound to maintain his daughter and the maintenance includes getting the daughter married to a suitable person. He has pointed out that there is a custom among the Christians to make payment of lump sum amount or cash to the daughters at the time of their marriage which is absolutely necessary for getting a suitable bridegroom. His further submission is that the said allotment of cash is not voluntary but for consideration. According to him there is no element of gift involved in such a transaction. In support of this contention, the assessee’s representative relied on the decision of the Andhra Pradesh High Court in the case of CIT v. Bandi Subba Rao [1987] 167 ITR 66, wherein the High Court has observed as under :
“It is the settled legal position that under the Hindu Adoptions and Maintenance Act, 1956, as well as under the general Hindu law, the obligation of the father to maintain his unmarried daughter as well as the married daughter so long as the daughter is unable to maintain herself from the family, viz., to which she was given, is transformed into a legal obligation.”
The Hon’ble High Court of Andhra Pradesh has further held that –
“Giving property to an unmarried daughter as incident to maintenance was a legal obligation cast on the father or any person receiving the property of the father except a purchaser for valuable consideration without notice of the said right of the daughter. Equally, giving a reasonable portion of property at the time of the marriage or subsequently in the discharge of that legal obligation, was not, thereby, a voluntary gift made by the father but was in compliance with his legal obligation. Any instrument executed by the father in discharge of the legal obligation or any settlement of a reasonable portion of the property in fulfilment of the existing legal claims of a married or unmarried daughter was not without consideration of money or money’s worth as contemplated under section 2(xii) of the Gift-tax Act, 1958, nor could it be said to be a voluntary one. A settlement or a gift made long after the marriage was in fulfilment of the pre-existing legal obligation of the father under the general Hindu law. Therefore, it ceased to be a voluntary act nor could it be labelled as without consideration. Therefore, it is neither an alienation nor a transfer, attracting section 2(xii) of the Gift-tax Act, but is a family settlement. Therefore, the assessee was not liable to pay gift-tax.”
The Andhra Pradesh High Court further held “that it was found as a fact that the assessee had only two daughters. Therefore, settling half the property on the two daughters could not be said to be unreasonable. Under those circumstances, the finding given by the Tribunal that the settlement was in discharge of the pre-existing legal obligation was legal and, therefore, no gift-tax was payable by the assessee”.
5. The learned departmental representative, Sri Kuruvila M. George tried to distinguish that the decision of the Andhra Pradesh High Court supra is in the context of the Hindu Adoptions and Maintenance Act, 1956 as well as under the general Hindu law. He submitted that this decision is not applicable to the Christians in the State of Kerala. If this argument of Sri Kuruvila is accepted it would amount that a Christian father is under no obligation to maintain his married or unmarried daughter and only the Hindu father is under the legal obligation to maintain his daughters. The principle of rule of law does not contemplate such a situation. The rule of interpretation is one and the same for every citizen of India without there being no exception. The learned representative for the assessee further relied on a decision of the Kerala High Court in the case of Scaria Varghese v. Marykutty 1991 (2) KLT 71. In that case under the Dowry Prohibition Act, 1961, the Hon’ble High Court of Kerala has held that suit for return of streedhanam or dowry is maintainable notwithstanding the Dowry Prohibition Act. It would be proper to reproduce the observations of the High Court from paras 18 and 19 of the decision which are as follows :
“18. It may be true that there is no specific statutory provision mandating a Christian father or a Christian husband to maintain his children and his wife. Of course, Indian Divorce Act provides for certain provisions for alimony and maintenance to the wife and children. Since there are provisions in the Indian Divorce Act can it be said that only when a claim for separation initiated under that statute a decree can be granted for maintenance or alimony for the wife and children.
19. The matters not governed by statute or where there is no accepted customary law, it is the settled principle that judge should be guided by that great principle of justice, equity and good conscience. Justice, equity and good conscience must be justice, equity and good conscience with Indian tradition. A father, an Indian citizen is bound to maintain his children and that is the tradition of the society and that tradition is in accordance with justice, equity and good conscience. Whatever be the special position in English Law on account of certain peculiarities of English system, to say that a father being a Christian and only on account of being a Christian should be considered as a person who has no obligation to maintain his children.”
In the case of Cheriya Varkey v. Ouseph Thresia AIR 1955 Trav. Coch. 255, the Court observed thus :
“In matters not governed by statute or customary law, it is the principles of ‘justice, equity and good conscience’ that should apply, and it is supposed that those principles are to be found in the Common Law of England. Under that law the obligation of the husband to maintain his wife is not a mere moral obligation but is a legal obligation which could be enforced in law although not by direct action by the wife. Therefore according to the personal law of the Christians in the Travancore-Cochin State, the husband has a legal obligation to maintain his wife. The wife is entitled to claim separate maintenance only if there is justifiable cause for her refusal to live with him. The question whether the wife has justifiable cause for refusing to live with her husband will depend upon the facts of each case. Desertion by the husband and habitual cruelty are recognised as justifiable causes.”
6. Firstly the Christians in Kerala are not governed by the Common Law of England. They are governed by statute or customary law. Certain similarities are there between Hindus and Christians in Kerala in respect of maintenance of wife and children, obligations to get married their daughters and to spend money to certain extent to get a decent match. These similarities cannot be ignored, nor discarded on the only ground that certain enunciated principles will apply only to Hindus and the same may not apply to Christians.
7. It was argued before us that there is a prevailing custom among the Christians in that the father is under an obligation to maintain his daughter before and after her marriage if the family to which she was given is not able to properly maintain his daughter.
8. The learned representative of the assessee also cited and relied on the decision of the Madras High Court in the case of CGT v. N.R. Agandeswara Iyer [1995] 214 ITR 360. In that case the assessee was the Karta of a family consisted of his two sons and two unmarried daughters. In a partition between the father and sons, the father was given a larger share because of the obligation of the family to maintain and marry off unmarried daughters. Later on, the father settled on his two unmarried daughters a part of the land held by him by settlement deeds dated 2-5-1970 and 4-5-1970. The value of this land was subjected to gift-tax treating the same as transferred without consideration. The assessment was set aside by the Tribunal. On a reference, the Hon’ble Madras High Court held that the Tribunal was justified in holding that there was no element of gift involved in the settlement deeds executed by the assessee on 2-5-1970 and 4-5-1970, liable to gift-tax under the Gift-tax Act, 1958.
9. On examination of the facts pertaining to the payment of Rs. 85,001 made by the assessee to his daughter at the time of her marriage under an obligation to maintain her even after marriage, the arguments particularly regarding the custom prevailing among the Christians in the Travancore-Cochin State that even the Christian father is under a legal obligation to make payment for maintenance of his daughter, just as the case with a Hindu father as held by the Andhra Pradesh High Court in Bandi Subba Rao’s case (supra) and as the principles enunciated are considered by the Kerala High Court in the case of Scaria Varghese (supra) and not being governed by the Common Law of England, coupled with the decision of the Madras High Court in N.R. Agandeswara’s case (supra), we have no hesitation to come to the conclusion that the Christian father is under a legal obligation to make certain and reasonable payment to his daughter at the time of her marriage on account of maintenance and such payment cannot be construed as a gift exigible to tax. Moreover, the characteristics of the payment cannot lead us to arrive at a conclusion that the payment is voluntary and without consideration. We are therefore of the further opinion that the discharge of the liability for maintenance and marriage is for a valid consideration. The Dowry Prohibition Act, 1961, extends support to this proposition. We are satisfied to hold that even a Christian father is under a legal obligation and discharge of such an obligation at the time of marriage of his daughter does not amount to making a gift exigible to gift-tax. So far as this obligation of the father is concerned, we do not find any substance to distinguish a Hindu father from a Christian father.
10. In the light of the above discussed facts and legal position, we are inclined to hold that the assessee is entitled to succeed.
11. In the result, the appeal is allowed.