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The following reply has been received from Advocate Shashi Ashok Bekal

On the basis of our understanding of your query, Since, you and your daughter are not legally related, it is precarious to claim exemption under section 56 2(x) of the Income tax Act, 1961 (Act) by virtue of (I) Proviso to section 56 2(x) of the Act i.e. "from a relative".

However, since she got married on August 26, 2020; and as per (II) Proviso to section 56 2(x) of the Act, any sum of money or any property received on the occasion of the marriage of the individual will not attract 56 2(x) of the Act.

Reference is drawn on the judicial precedents to facilitate the interpreting the phrase on the occasion of marriage they are as under:

The Honble High Court of Orrisa in the case of Commissioner of Gift-tax v. Dr. (Mrs.) Neelambai Ramaswamy [1987] 164 ITR 369 (Madras) (Gift tax Act 1958) where nearly eleven months after marriages of her son and daughter assessee gifted certain properties to them by separate gift deeds which stated that gifts were intended to be made at time of marriage but could not be made then because of certain unfortunate events including death of assessees younger son. Tribunal found that delay in making gifts stood satisfactorily explained and assessee was entitled to exemption under section 5(1)(vii) in respect of aforesaid gifts. The Tribunal held that the expression on the occasion of the marriage would mean in relation to the occasion of the marriage.

The revenue contended that the expression on the occasion of the marriage could only mean at the time of the marriage or immediately preceding the marriage and could not be interpreted as meaning any time subsequent to the marriage. Accordingly the order of the Tribunal was upheld and the question was decided against the revenue.

The Honble High Court of Madras in the case of A. Rudrakodi v. CIT [2000] 244 ITR 309 (Mad.) where the assessee made gifts to his married daughter in September 1975 (almost 4 years after her marriage took place in September 1971). As the assessee had certain financial commitments at the time of the performance of the marriage of his daughter he could not make any substantial presentation to his daughter at the time of her marriage. However after some improvements in his financial position he subsequently made a gift of Rs. 15000 to his daughter on September 29 1975. Applying the ratio in Dr. (Mrs.) Neelambal Ramaswamy (supra) the Madras High Court held that this gift has been made on occasion of marriage and allowed the assessee exemption under section 5(1)(vii) of the Gift-tax Act 1958.

The Honble High Court of Madras in the case of CGT v. G. Venkataswamy [1999] 236 ITR 539 (Mad.) where the assessee was a retired inspector of police. His daughter got married on August 25 1964 and the assessee made a gift of land worth Rs. 34000 to his daughter in 1979 (after 15 years from the marriage) and claimed exemption during the course of the assessment proceedings for the year 1979-80 under section 5(1)(vii) of the Gift-tax Act 1958 (hereinafter to be referred to as the Act). The gift deed contained the following recital:

Whereas the donor has not provided with means to live and as he promised at the time of marriage he devised the property described hereunder as unconditional gift for support and maintenance absolutely.

The High Court accepted the finding of the Tribunal (based on the above clause) that there was an earlier promise by the donor at the time of her marriage to make a gift in favour of his daughter and in fulfilment of the earlier promise the assessee transferred the property by way of gift in favour of his daughter. The High Court also accepted the Tribunals finding that the assessee being a retired inspector of police would not have made a false statement in the gift deed just for claiming exemption of Rs. 10000. Applying the ratio in Dr. (Mrs.) Neelambal Ramaswamy (supra) the Madras High Court held that this gift has been made on occasion of marriage and allowed the assessee exemption under section 5(1)(vii) of the Gift-tax Act 1958.

In light of the above judicial precedents it is clear that the phrase on the occasion of marriage does not mean on the date of marriage or immediately preceding the marriage.

Without prejudice the reason for delay in the gift deed can be substantiated on account of the novel corona-virus pandemic. Further the wedding has taken place amidst the pandemic and normalcy has not been restored till date.

Therefore a gift deed for the occasion of marriage can be executed in favour of your daughter who is legally not a relative.

Kind Regards

Shashi Ashok Bekal

C.A. LL.M. (Tax Law)

Tax Litigation & Advisory

Mumbai  Delhi
Thanks. This is a very important resource for practising professionals.
S. 250/ 254: If a decision is challenged by the assessee both on the issue of jurisdiction as well as on merits, the appellate authority has to decide both issues. He cannot decline to decide one of the issues on the basis that the decision on the other issue renders it academic. This approach leads to multiplication of proceedings and leads to delay

I.T.A. No.6098/Mum/2016

Income Tax Officer-12(3)(4), M/s. Mohanraj Trading & Exchange

following CIT vs Ramdas Pharmacy [1970] 77 ITR 276 (Mad)

Discussion / PWC Auditors of Satyam arrested by Police
January 24, 2009, 08:51:47 PM
From moneycontrol.com

Sources in the Hyderabad police said the CB-CID police have arrested Satyam's two Pricewaterhouse auditors S Gopal Krishnan and Srinivas Talluri last night. Pricewaterhouse had not responded to the arrest, at the time of filing the report.

Earlier on Friday, the 6th Metropolitan Magistrate of the Nampally Court rejected the petition of market regulator Securities Exchange Board of India (Sebi) to interrogate the Raju brothers — Ramalinga Raju and Rama Raju — in connection with the Rs 7,000 crore Satyam corporate scam that rocked the country recently.

Sebi had filed a petition with the court to record the statement of the Raju brothers. The court rejected the Sebi petition "on technical grounds" and not on merits of the case.

Maintainability and jurisdiction could be the reasons for the petition being rejected and it is said the Sebi may need to approach the appropriate higher court to get the petition reviewed.

The magistrate also asked the Serious Fraud Investigation Office (SFIO) to rework its petition to include suitable sections to interrogate the under-judicial-custody Raju so that it can be allowed to go ahead.

The magistrate also extended the judicial custody of the Raju brothers and ex-Satyam CFO Srinivas Vadlamani till January 31. The bail petition of Ramalinga Raju and Vadlamani will take place on January 27, while the order on Rama Raju's bail petition was postponed to January 28.

In a related development, the CB-CID confirmed the arrest of Gopal Krishnam Raju, the general manager of SRSR Advisory Services, a firm promoted the Raju family.

The police also conducted search operations at the office of Maytas Infra in Greenlands, Somajiguda area in Hyderabad.

Discussion / Vodafone SLP dismissed by SC
January 23, 2009, 04:29:36 PM
SC asks Vodafone to respond to I-T notice
Press Trust of India
Friday, January 23, 2009 (New Delhi)

In a major setback to Vodafone, the Supreme Court today refused to intervene in the tax claim case of about $2 bn and asked the telecom firm to present its version before the I-T authorities and respond to the showcause notice.

A bench headed by Justice S B Sinha refused to hear the Vodafone plea that had challenged the Bombay High Court judgment, which on December 3 last year had dismissed a petition by Vodafone International Holdings BV, contesting a showcause notice by the I-T Department.

Vodafone, the Netherlands-based company, had bought a 67 per cent stake in Hutchison Essar from Hutchison Telecom International (HTIL) in February 2007 for $11.2 billion.

The I-T Department had asked the telecom major to pay $1.7 billion as capital gains tax for its acquisition of stake in Hutchison Essar (now Vodafone Essar) through a showcause notice on September 19, 2007.

According to Vodafone, it had purchased the entire share capital of non-resident company CGP Investments (Holdings) from HTI (BVI) Holdings, a foreign company having no presence in India. The entire consideration for the share capital purchase was paid outside India without deducting tax at source, it added.

Vodafone had moved the Bombay High Court alleging that the I-T Department had no jurisdiction over a deal between two parties incorporated overseas.

The text of the judgement of the Bombay High Court is available here
Discussion / Re: Functioning of Tribunal
December 03, 2008, 03:35:47 PM
The notice put up on the Notice Board says that:

"All cases fixed for hearing on 27.11..2008 are adjourned to 2nd February 2009".

There is no notice for matter fixed on 28th Nov. Please contact the respective Bench Clerks to ascertain the adjourned date.


Discussion / Re: Recent decsion of ITAT
August 19, 2008, 02:17:36 AM



Bright Star Investment Pvt. Ltd.

ITA NO. 6374/MUM/2004

July 2, 2008


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6. Having heard the rival submissions and from careful perusal of the record, we find that the shares held in stock in trade were converted into investment at the book value shown in the books of accounts.  Later on, the shares held in investment were sold and the assessee offered the capital gain accrued on the sale of shares.  Admittedly, the provisions of section 45(2) of the I.T. Act, deals with issue of capital gain where the investment is converted into stock-in-trade.  According to this section, the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into or its treatment by him as stock in trade of a business carried on by him, shall be chargeable to tax as the income from the previous year in which such stock in trade is sold or otherwise transferred by him, and for the purpose of section 48, fair market value of the asset on the date of such conversion or treatment, shall be deemed to be the full value of the consideration received or accruing as a result of transfer of the capital asset.  While incorporating the sub-section 2 to section 45, the legislature has not visualized the situations in other way round, where, the stock in trade is to be converted into the investments and later on the investment was sold on profit.  In the absence of a specific provision to deal with this type of situations, a rational formula should be worked out to determine the profits and gains on transfer of the asset.  We are also conscious about the judgments in the cases of Sir Kikabhai Premchand v. CIT (1952) 24 ITR 506 (S.C.), CIT v. Dhanuka & Sons 124 ITR 24 (Cal.) (supra) in which it has been held that there cannot be an actual profit or loss of such transfer when no third party is involved and the items are kept in the different account of the assessee himself.  The question of gain or loss would arise only in future when the stock transferred to the investment account might be dealt with by the assessee.  If such shares be disposed of at a value other than the value at which it was transferred from the business stock, the question of capital loss or capital gain would arise.  In the absence of a specific provision to deal with the present situation, two formulas can be evolved to work out the profits and gains on transfer of the assets.  One formula which has been adopted by the Assessing Officer i.e.,difference between the book value of the shares and the market value of the shares on the date of conversion should be taken as a business income and the difference between the sale price of the shares and the market value of the shares on the date of conversion, be taken as a capital gain.  The other formula which is adopted by the assessee's i.e., the difference between the sale price of the shares and this cost of acquisition of share, which is the book value on the date of conversion with indexation from the date of conversion, should be computed as a capital gain.  In the absence of a specific provision, out of these two formulas, the formula which is favourable to the assessee, should be accepted.  We, therefore, of the view that Commissioner (Appeals) has properly examined this issue in the present situation and directed the Assessing Officer to accept the capital gain offered by the assessee.  We, accordingly, confirm his order.

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The judgement you are looking for is here:



Discussion / Re: Where to read case laws online for free
February 25, 2008, 02:50:51 PM
Hi Rounak,

Welcome to the forum. The answer to your question is http://indiankanoon.com/index.html.

The full text of Azadi Bachao 263 ITR 706 that you are looking for is available there.


As per the latest information, the order has still not been passed.


November 21, 2007, 11:07:37 AM
Thanks for the update. It is greatly appreciated.

Discussion / Re: Seminar news
June 19, 2007, 11:18:16 PM
We do not conduct any seminars or discussion programmes. BCAS http://www.bcasonline.org/ conducts several seminars throughout the year. Also please visit http://www.aiftponline.org/ and http://www.citcindia.org/. They are also very active in this respect.


Discussion / Re: Hyundai SC decision
June 09, 2007, 08:38:53 PM
It has been uploaded now and you can download it from here:
(right click and choose "save as")

Discussion / Re: s. 80HHC versus s. 80-IA
June 08, 2007, 09:03:27 PM
The decision of the Chennai Special Bench in ACIT vs. Rogini Garments is available here:


It has been held that relief under section 80-IA should be deducted from profits and gains of business before computing relief under section 80-HHC of the Act.