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TMI Blog1968 (10) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... n connection with the estate of Aniritlal alias Bhailalbhai, who died on February 21, 1962. The deceased was a partner along with two other persons, Revashanker and Nandlal, in a partnership firm which carried on business in the firm name and style of M/s. Revashanker Balashanker. Each of the three partners had an equal share in the profits of the firm. In S. Y. 2002, the deceased had to his credit in the books of the partnership firm a sum of Rs. 54,858. On October 22, 1946, the account of the deceased was debited with the sum of Rs. 30,000 and each of his three minor sons, Jayantilal, Chandravadan and Navinchandra, was credited with a sum of Rs. 10,000. Accounts were opened in the names of the three minor sons and each of the three accounts was credited with a sum of Rs. 10,000 and the entries clearly show that the amount of Rs. 10,000 was given by the deceased to the son in whose name the account stood. Thereafter, the accounts of the three sons were continued in the partnership books. On January 1, 1958, the account of the deceased with the partnership firm was debited with a sum of Rs. 24,000. By this time, the two sons, Chandravadan and Jayantilal, had attained majority and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retained in the firm, wherein the deceased was a partner, the provisions of section 10 of the Act would apply. In the result, he brought to charge the sum of Rs. 58,166, i.e., principal amount of Rs. 54,000 and interest on that amount. The accountable person thereafter preferred an appeal to the Appellate Controller and he held that the sum of Rs. 30,000 could not be said to have been gifted by the deceased and hence the sum of Rs. 30,000 together with interest referable to the same was includible in the principle value of the estate of the deceased. As regards the amount of Rs. 24,000, the Appellate Controller held that, though the gifts were genuine, the principle laid down by the Privy Council in Clifford John Chick v. Commissioner of Stamp Duties applied and hence he included the sum of Rs. 54,000 in the principal value of the estate of the deceased. He held that the interest referable to the sum of Rs. 24,000 should be ignored inasmuch as section 10 of the Act would not be applicable to the subsequent accretion to the amounts gifted. Thereafter, there was an appeal to the Tribunal and the Tribunal held that the gifts of Rs. 30,000 and Rs. 24,000 were valid gifts. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal. Mr. Shah, on behalf of the accountable person, drew our attention to a recent decision of the Andhra Pradesh High Court in Mohammed Bhai v. Controller of Estate Duty. This judgment of the Andhra Pradesh High Court was not available to us when the judgment in Estate Duty Reference No. 1 of 1965 was delivered by us and it can only be considered in the present judgment since Mr. Shah relied upon it. In that case, the deceased made gifts of his business in stationery goods and certain house properties to his sons. Subsequently, he made a gift to his wife of his house in which he was residing and continued to reside in it thereafter. All these gifts were made in 1952 and the deceased died in 1958. Ever since the gifts, the sons were making payments to the deceased regularly at the rate of Rs. 200 per month and they also gave an amount of Rs. 16,902 to him for the marriage expenses of his daughters, in accordance with oral promises made by them. The Assistant Controller included in the estate of the deceased these properties under section 10 of the Act on the ground that the deceased was deriving benefit from the properties gifted by him. The house property was also included on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty to his wife, he derived a benefit therefrom. " If this is the basis of the decision of the Andhra Pradesh High Court, with great respect to the learned Chief Justice, we are unable to agree with his conclusions, because it is clear in the light of the principles laid down in Chick's case and also in George Da Costa's case that, so far as the first limb of the second part of section 10 is concerned, what the court has to look at is whether there has been entire exclusion of the donor from possession and enjoyment of the property. In that connection whether there is any benefit derived from the property or not does not arise for consideration. It is only under the second limb of the second part of section 10 that the question arises whether there was any exclusion from any benefit by contract or otherwise. If there is non-exclusion of the donor from the property, that is, if the first limb of the second part of section 10 applies, as explained by the Supreme Court in George Da Costa's case, there is no question of invoking the second limb of the second part of the section. With great respect to the learned judges of the Andhra Pradesh High Court, this aspect of non-exclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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