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Case law › Circulars › 1985 › Circular No. 419
CBDT circular 1 June 1985

Circular No. 419

419 dated 01 06 1985

What this is

Circular No. 419 was issued by the Central Board of Direct Taxes on 1 June 1985. Its subject is 419 dated 01 06 1985.

What it does

Records the Department's acceptance, in principle, that what a karta gives his daughter on her marriage out of joint family funds is not a gift for gift-tax. In CGT v. Basant Kumar Aditya Vikram Birla [1982] 137 ITR 72, the karta gave jewellery, cash and a refrigerator worth Rs. 67,744 to his daughter at her marriage, and the family contended these were marriage expenses and not a gift within section 2(xii) of the Gift-tax Act, 1958. The Calcutta High Court upheld that contention on the footing that an unmarried daughter of the family has a right to have her marriage expenses met out of the joint family fund and the joint family is under a legal obligation to provide for them. The Board states that the Department has accepted the judgment in principle.

Why it was issued

The Board communicated its acceptance of the High Court's view so that the point would not continue to be litigated.

Who it reaches

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.
Under the 1961 ActNow
s.2s.2, s.346, s.355

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

GIFT-TAX ACT

SECTION 2
Definitions
SECTION 2(xii ) l GIFT
1435. Whether gifts made by karta on marriage of his daughter fall within the ambit of "gift" under clause (xii)
In the case of CGT v. Basant Kumar Aditya Vikram Birla [1982] 137 ITR 72 (Cal.), the karta of the assessee-HUF gave jewellery, cash and fridge of the value of Rs. 67,744 to his daughter at the time of her marriage. The assessee-HUF claimed that these were marriage expenses and did not fall within the ambit of the term "gift" as defined in section 2(xii) of the Gift-tax Act, 1958. The Calcutta High Court has upheld the assessee’s contention on the ground that being an unmarried daughter of the family the daughter has a right to have the expenses of her marriage incurred out of the joint family fund. The joint family is under a legal obligation to provide for such marriage expenses. The Department has accepted, in principle, the judgment of the High Court.
Circular: No. 419 [F. No. 333/3/85-GT], dated 1-6-1985.

What to watch

Where you meet it

In an old gift-tax assessment on a family that spent on a daughter's wedding out of joint family funds.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

← Circular No. 420  ·  Circular No. 418 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.