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TMI Blog1969 (3) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... uded the same as dutiable, but the Tribunal was not prepared to accept that view. In doing so, the Tribunal felt supported by Munro v. Commissioner of Stamp Duties. At the instance of the Commissioner of Income-tax who is the Controller of Estate Duty, the following question has been referred to this court : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 1,29,924 was liable to estate duty as property deemed to pass on the death of the deceased under section 10 of the Estate Duty Act, 1953 ? " The revenue's point of view was that there were no cash gifts of the two sums but they were brought about by mere adjustments in the books without physical handing over of the cash and further by being a partner in the firm, the deceased was not entirely excluded from the subject-matter and beneficial enjoyment of the gifts. The Assistant Controller noticed that this was not a case of the deceased parting with cash and thereafter the donees re-introducing such cash in the business at a later stage, but nevertheless he thought that this made no difference and he would add that the deceased had also beneficial enjoyment of the gifted properties. Confronted with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, on a consideration of the entire facts, the book entries of the two amounts were made in effecting the transfer, the donor being fully alive to the fact that there would be no handing over of those two sums in cash to the donees and they would be available for the continued use of the partnership in the business and in that contingency, therefore, the amounts, while being used in the firm, would be looked after, managed and controlled by the father in his capacity as the managing partner. Mr. Balasubrahmanyan for the revenue heavily relied on Clifford John Chick v. Commissioner of Stamp Duties and suggested that as Munro v. Commissioner of Stamp Duties merely related to a case of reservation of benefits to the donor or rather non-exclusion of the donor from a benefit, it would be inapplicable to the facts of this case. Clifford John Chick v. Commissioner of Stamp Duties related to a transfer by a father by way of gift to one of his sons a certain pastoral property, the gift being without any reservation, qualification or condition. Months later, the donor, the donee and another son of the donor entered into a partnership agreement to carry on the business of graziers and stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsoever kind. But it is difficult to see what bearing they have when the simple question is whether the donor has been excluded from the subject-matter of the gift, a pastoral property known as 'Mia Mia', and the clear answer is that he has not. " Munro v. Commissioner of Stamp Duties was cited before the Board but Viscount Simonds stated as to that : " It follows that the decision of this Board in Munro v. Commissioner of Stamp Duties on which the appellants relied, has no application to the present case. It must often be a matter of fine distinction what is the subject-matter of a gift. If, as in Munro's case, the gift is of a property shorn of certain of the rights which appertain to complete ownership, the donor cannot, merely because he remains in possession and enjoyment of those rights, be said within the meaning of the section not to be excluded from possession and enjoyment of that which he has given." It may be seen that in Clifford John Chick v. Commissioner of Stamp Duties the gift of the property made by the father to the son was as complete as it could be and there was no reservation whatever. But because of the requirement that the donor should be excluded even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what precisely was the subject-matter of the gift, that is to say, the gift was not of the entire land with all the rights going with it, but only shorn of the right which belonged to the partnership under the terms of the agreement between the father and the sons constituting the firm. That is precisely the case here. The nature, extent and manner of enjoyment of the two sums gifted by the father to his sons and daughter were no different in the hands of the donees. At the time of making the gift, having regard to the facts, it has to be taken that the two sums transferred by book entries were still available for purposes of the business of the firm which mean that their user for that purpose would be controlled by the managing partner. In the very nature of things, therefore, the transfer of the two sums by way of gift should be taken subject to the rights of the firm and in the words of the Privy Council in Munro v. Commissioner of Stamp Duties' the two sums were transferred to the donees shorn of the rights which belonged to their partnership. On that view, there can be no question that immediately on the making of the gift, the donees assumed such possession and enjoyment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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