Tuesday, June 29, 2010

Costly gifts at weddings to come under tax scrutiny

Costly gifts at weddings to come under tax scrutiny

Exchange of expensive gifts and jewellery items during wedding marriage ceremonies are liable to taxmen scrutiny, said a city court.

It also said that immovable assets as gifts would require mandatory authentic registration.

Additional Sessions Judge Kamini Lau said, “Pricey gifts given to relatives, which do not fall within the definition of Stridhan (gift items received by girl) are taxable in the hands of the recipient.” Citing a dowry complaint, the judge said it is important for families of both the bride and the groom to divulge their revenue books to the taxmen.

The court said anti-dowry laws have been reduced to “paper tigers”.

“Dowry has become an avenue to bury black money during marriage ceremonies,” said Lau.

“It is necessary to ensure that due inquiry and investigations are conducted not only with regard to the source of income of the person giving dowry, but also as to whether these transactions are duly reflected in the Wealth Tax returns of both,” she added.

Presiding over a case of an estranged couple, in which the wife was appealing against the order passed by a trial court, Lau observed that incidents of abuse of special provisions of dowry harassment law has become the trend.

The trial court in October 2009 had ordered registration of an FIR against the wife and her family for giving dowry at her wedding. The groom had filed a complaint saying his wife had wilfully admitted of giving gifts and money to his family.

The additional sessions judge quashed the wife’s plea seeking to cancel the criminal proceedings initiated against her family. An FIR was registered against her family following the complaint by her husband, who is facing dowry harassment charges.



While laws prohibiting dowry not only forbid receipt but also giving it, a city court, in a significant observation, held that the brides’ families are to be blamed for rendering the social welfare legislation largely ineffective.

“It is unfortunate that the legislation (Dowry Prohibition Act) has been reduced to a mere paper tiger. What is more unfortunate is that the family of the woman (involved in the marriage) is responsible for the non-accomplishment of this legislation,” Additional Sessions Judge (ASJ) Kamini Lau noted.

To meet the objectives of the law, not only the grooms’ families but also the brides’ must be booked for giving dowry in the name of social obligation, the court said.

“Dowry is a two-way traffic and unless there is a giver there can be no taker... In order to eliminate this evil both the giver and taker have been made liable under the Act. It is not possible to leave one and book the other,” ASJ Lau said.

“It is time this social welfare legislation is ruthlessly implemented and none is permitted to take the shield of social compulsion. This has become all the more necessary in order to check the misuse and abuse of special laws,” she added.

The court also said expensive gifts given by relatives to a couple before and after marriage must be brought to the notice of the authorities for levying of taxes.

The court made the observations while dismissing the plea of a woman seeking to quash criminal proceedings initiated against her family for giving of dowry following a complaint by her husband who faced dowry harassment charges. The woman had challenged the order by a Metropolitan Magistrate in October last year, who had directed the registration of an FIR against her family members for giving dowry for her marriage in April 2008.


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