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Issues Involved:
1. Validity of gifts of Rs. 10,000 each to three sons made on October 20, 1946. 2. Applicability of section 10 of the Estate Duty Act to the gifts of Rs. 10,000 each. 3. Applicability of section 10 of the Estate Duty Act to the gift of Rs. 24,000. 4. Inclusion of accumulated interest on Rs. 30,000 in the principal value of the estate. Detailed Analysis: Issue 1: Validity of Gifts of Rs. 10,000 Each to Three Sons The court did not find it necessary to address the validity of the gifts of Rs. 10,000 each made on October 20, 1946, in light of its conclusions regarding the applicability of section 10 of the Estate Duty Act. Issue 2: Applicability of Section 10 of the Estate Duty Act to the Gifts of Rs. 10,000 Each The court affirmed that section 10 of the Estate Duty Act applied to the gifts of Rs. 10,000 each. The deceased had credited Rs. 10,000 to each of his three minor sons in the partnership firm's books. The Tribunal found that the gifts were retained in the firm, wherein the deceased was a partner, thus not entirely excluding the donor from the possession and enjoyment of the property. This conclusion was supported by the precedent set in Chick's case and the Supreme Court's decision in George Da Costa's case. Issue 3: Applicability of Section 10 of the Estate Duty Act to the Gift of Rs. 24,000 The court affirmed that section 10 of the Estate Duty Act applied to the gift of Rs. 24,000. The deceased had debited Rs. 24,000 to his account and credited Rs. 12,000 each to his two sons, who had attained majority. The sons later deposited these amounts back into the partnership firm. The court held that the deceased was not entirely excluded from the possession and enjoyment of the property, as the amounts were made available to the partnership in which the deceased had an interest. This decision was consistent with the principles laid down in Chick's case and the court's earlier decision in Estate Duty Reference No. 1 of 1965. Issue 4: Inclusion of Accumulated Interest on Rs. 30,000 in the Principal Value of the Estate The court held that the accumulated interest on the sum of Rs. 30,000 could not be included in the computation of the principal value of the estate. Section 10 applies to the property that is the subject-matter of the gift and not to the income from or subsequent accretion to that originally gifted property. The Tribunal's view that the interest referable to the sum of Rs. 30,000 should not be included was upheld. Conclusion: 1. The validity of the gifts of Rs. 10,000 each was deemed unnecessary to address. 2. Section 10 of the Estate Duty Act applied to the gifts of Rs. 10,000 each. 3. Section 10 of the Estate Duty Act applied to the gift of Rs. 24,000. 4. The accumulated interest on Rs. 30,000 could not be included in the principal value of the estate. The accountable person was ordered to pay the costs of the reference to the Controller.
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