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1. Inclusion of gifted property in the estate under the Estate Duty Act, 1953. Analysis: The judgment by the High Court of Bombay involved a dispute regarding the inclusion of a gifted property in the estate under the Estate Duty Act, 1953. The deceased was a member of a family society and had gifted half of his shares to his sons. The Assistant Controller of Estate Duty included the value of the gifted shares in the deceased's estate, but the Tribunal later deleted the inclusion. The key question was whether the gifted amount should be considered part of the deceased's estate for taxation purposes. The Assistant Controller of Estate Duty argued that the deceased continued to enjoy his share in the family society till his death, and therefore, the gifted property should be included in his estate. However, the Tribunal disagreed, stating that the deed of gift did not indicate exclusive possession and enjoyment by the donees to the exclusion of the deceased. The High Court examined the deed of gift and the deed of dissolution of the family society. It was noted that the deceased and his wife had reserved the usufruct for themselves, indicating that the gift was not absolute but subject to certain rights. The High Court referred to a Supreme Court decision in the case of CED v. Godavari Bai, which clarified that the nature of the gift determines its inclusion in the deceased donor's estate. If the gift is absolute with exclusive possession and enjoyment, it would be included in the estate. However, if the gift is subject to reservations or qualifications, and the donor retains some rights over the property, then the gifted property would not be deemed to pass on the donor's death. Applying this principle, the High Court ruled in favor of the accountable person, stating that the gifted property was not includible in the deceased's estate under section 10 of the Estate Duty Act, 1953. In conclusion, the High Court held that the gifted property, being subject to reservations and the deceased retaining certain rights, was not includible in the deceased's estate for estate duty purposes. The judgment clarified the legal principles governing the inclusion of gifted property in the estate under the relevant legislation and precedent.
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