TMI Blog1989 (3) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... gineering Mfrs. (P.) Ltd. to a married daughter, Smt. Anuradha and another 400 shares in the same company to the other married daughter, Smt. R. Ranjini. The market value of each lot of 400 shares was shown as Rs. 2,04,632 in the gift-tax return. The total wealth of the HUF in this year was Rs. 18,98,729. In the share transfer form under the column " Consideration ", the following narration was recorded : " One lakh eight thousand in discharge of Hindu Law Obligation. " 3. On these facts the assessee claimed, relying on the decision of the Madras High Court in the case of CGT v. M. Radhakrishna Gade Rao [1983] 143 ITR 260 that the transfer of shares did not amount to a gift and therefore they should not be assessed to gift-tax. The Gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t over this HUF property and there was no question of transferring any assets to discharge any existing obligation. It was further pointed, out that the cases referred to by the CGT (Appeals) including the case of M. Radhakrishna Gade Rao related to unmarried daughters and wife of the Karta and there was no decision in which a transfer of an asset to a married daughter had been regarded as in discharge of any obligation of the HUF. In the alternative, it was submitted that the extent of the gift was excessive and unreasonable and hence the entire amount would not enjoy the exemption from gift-tax. 6. On the other hand, it was contended on behalf of the assessee that the right to maintenance was traceable to an earlier right to share in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue in this case is that there was no present obligation of the HUF inasmuch as the daughters ceased to be the members of the family on getting married. No doubt, it has been observed in the case of Ethilavulu Ammal v. Pethakkal [1951] 1 MLJ 76 that she was married into another family and by reason of the marriage the guardianship of the father came to an end. But we cannot accept the contention of the revenue that upon marriage her right for maintenance from the HUF property ceases entirely. This is because firstly as observed by the Supreme Court in the case of Guramma Bhratar Chanbasappa Deshmukh, the Hindu Law texts once conferred a right upon a daughter or a sister, as the case may be, to have a share in the family property at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight to set apart any property to discharge the obligation attached to the joint family to maintain any female member of the family and thus keep the remaining property free from all such obligation. This he can do before the daughter gets married and there is no reason why he should not do it after she gets married since the obligation which enured to her from birth is not extinguished on her marriage, for, after all the right to be maintained can only mean that provision should be made for her upkeep during her lifetime. Indeed the Supreme Court observed in the case of Guramma Bhratar Chanbasappa Deshmukh that the father can make a reasonable provision for the maintenance of the daughter regard being had to the financial and other circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim the family is entitled to settle the matter by an arrangement so that the honour of the family is saved. The Supreme Court has affirmed in the case of Kale v. Dy. Director of Consolidation [1976] 3 SCC 119 that, " A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour. " [Emphasis supplied] The Supreme Court has also stated in the case of Shanmugham Pilla [1973] 2 SCC 312 that parties to a family arrangement need not be members of the same family. Consequently, the assets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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