1979 (9) TMI 31 - HC - Income Tax

Summary

Issues:
1. Interpretation of section 10 of the Estate Duty Act regarding gifts of cash amounts.
2. Inclusion of gifted amount in the estate of the deceased under section 10 of the Act.
3. Inclusion of the value of a share in the goodwill of a firm in the estate of the deceased under section 10 of the Act.

Analysis:

Issue 1:
The court found it unnecessary to consider whether section 10 of the Estate Duty Act covers gifts of cash amounts as it was agreed that it was covered by the second question.

Issue 2:
The court determined that the total sum of Rs. 1,60,000 gifted by the deceased to his sons and grandsons should not be included in the estate of the deceased, based on previous court decisions and the assumption that the gift was entirely excluded from the donor.

Issue 3:
Regarding the inclusion of the value of a share in the goodwill of a firm in the deceased's estate, the court analyzed the provisions of section 10 of the Act. It was argued that the deceased had not been entirely excluded from the subject-matter of the gift. However, the court held that the deceased continued to enjoy his own share in the partnership, which had not been gifted, and therefore, the value of the share in the goodwill was not liable to be included in the estate. The court cited previous cases to support this decision, emphasizing that the donor must be entirely excluded from the possession and enjoyment of the gifted property for it to be included in the estate.

In conclusion, the court declined to answer the first question, answered the second and third questions in the negative, and ordered the department to pay the costs of the reference to the accountable person.