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1991 (7) TMI 68 - SC - Income TaxWhether the gift of movables valued at ₹ 67,578 is not a gift made in contemplation of death within the meaning of section 5(1)(xi) of the Gift-tax Act, 1958? Held that:- the recitals in the deed of gift are not conclusive to determine the nature and validity of the gift. The party may produce evidence aliunde to prove that the donor had gifted the property when he was seriously ill and contemplating his death with no hope of recovery. These factors, in conjunction with the factum of death of the donor, may be sufficient to infer that the gift was made in contemplation of death. It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift. It is not necessary to state in the gift deed that the donee becomes the owner of the property only upon the death of the donor. Nor is it necessary to specify that the gift is liable to be revoked upon the donor's recovery from the illness. The law acknowledges these conditions from the circumstances under which the gift is made. Thus it can be reasonably concluded that the gift was not absolute and irrevocable. On the contrary, it will be legitimate to infer that the gift was in contemplation of death. The only limitation under the Mahommedan law is that the disposition is restricted to a third on account of the right of the heirs. A Marz-ul-maut gift cannot, therefore, take effect beyond a third of the estate of the donor after payment of funeral expenses and debts unless the heirs give their consent after the death of the donor, to the excess taking effect. Whether there is any such consent given in this case by his heirs is the subject-matter of enquiry to be made by the Tribunal. It may be stated that the second question referred to the High Court relates to the validity of the gift beyond a third of the estate of the donor. On that question, the High Court has not expressed any view and it has directed the Tribunal to consider that issue afresh. Appeal dismissed.
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