LexCOMMISSIONER OF GIFT TAX, ERNAKULAM versus ABDUL KARIM MOHD. (DEAD) BY LRS.
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COMMISSIONER OF GIFT TAX, ERNAKULAM
v.
ABDUL KARIM MOHD. (DEAD) BY LRS.
JULY 10, 1991
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[K. JAGANNATHA SHETTY AND YOGESHWAR DAYAL, JJ.]
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Gift Tax Act, 1958/lndian Succession Act, 1925: Section 5(l)(xi)/
Section 191-Gift in contemplation of death-Essential requirements
of-Gifi of movable property-Donor seriously ill at the time of execu-
tion of deed and died shortly thereafter-Delivery of possession of
c gifted propertj effected-No indication in the document specifically or
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impliedly that gift would be effective only if donor died or liable to be
revoked in case donor recovered-Whether gift valid-Whether entitled
to exemption.
Mohammedan Law: Marz-ul-maut (deatn-bed illness)-What is-
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Gift made during marz-ul-maut-Whether entitled to exemption under
Gift Tax Act-Section 191, Indian Succession Act-Applicability of.
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Gift of certain movable assets was made to the respondent-
assessee by a Muslim businessman, when he was seriously ill, and died
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of the illness after six weeks of the execution of the document. In gift-tax
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assessment proceedings, the assessee claimed exemption for this gift
under Section S(l)(xi) of the Gift Tax Act, 1958, on the ground that the
gift was made in contemplation of death. The Gift Tax Officer rejected
the claim. But, on appeal, the Appellate Assistant Commissioner
allowed the exemption relying on the circumstances under which the
gift was made and the events followed thereafter and the evidence of the
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Sub-Registrar, who was brought to residence for effecting registration,
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and the doctor, who was treating the donor.
On appeal by the Gift-Tax Officer, the Tribunal affirmed the
finding of the Appellate As..istant Commis..ioner regarding the donor's
illness but did not allow the exemption on the ground that, though there
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was delivery of possession of the gifted movables, the gift was uncondi-
tional and absolute, since it had not been specifically expressed or
impliedly present in the deed that the gift must revert back in the event
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of the donor recovering from illness and that the gifted property had to
be kept as a gift in case the donor died of his illness. However, on a
reference made at the instance of the assessee for opinion, the High
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Court held that such a condition need not be mentioned in the deed and
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C.0.G.T v. ABDUL KARIM
847
it could be inferred from the attending circumstances of the gill, and
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since the donor was actually sick at the time of execution of the deed and
died of the same illness without recovery, after a short period, the gift in
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question was made in contemplation of death and therefore, entitled to
exemption from tax under Section 5( l)(xi) of the Act.
In the appeal before this Court, on behalf of the Department it
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was contended that the gift in contemplation of death should be condi-
tional, and in the absence of indications in the document to the effect
that if the donor did not die, he should be entitled to remain in complete
dominion of the gifted property, the gift would become inter vivas and
absolute, and that the exemption under Section 5( l)(xi) of the Gift Tax
Act was not available to the assessee, since Section 191 of the Indian c
Succession Act was not applicable to marz-ul-maut gift.
Dismissing the appeal by. the Department, this Court
HELD: 1.1 Explanation (d) to sub-section (2) of Section 5 of the
Gift Tax Act, 1958 states that a gift made in contemplation of death has D
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the same meaning as in Section 19 l of the Indian Succession Act, 1925.
The requirements of a gift in contemplation of death as laid down by
Section 191 are: (i) the gift must be of movable property; (ii) it must be
made in contemplation of death; (iii) the donor must be ill and he
expects to die shortly of the illness; (iv) possession of the property
should be delivered to the donee; and (v) the gift does not effect if the E
donor recovers from the illness or the donee predeceases the donor.
These re9uirements are similar to the constituent elements of a valid
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donatio mortis cansa. [853C-E]
Cain v. Moon, (1896] 2 Q.B. 283@286, referred to.
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1.2 In the instant case, all the conditions prescribed, except
perhaps the last one are found present by the fact finding authorities. [ 853G J
1.3 The recitals in the deed of gift are not conclusive to determine
the nature and va:lidity of the gift. The party may produce evidence
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8Iiunde to prove that the donor gifted thExcerpt shown. Read the full judgment & AI analysis in Lexace.