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TMI Blog1970 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... to the share of the wife and children. Since Kader Ooran died within two years of the date of the gift, the sum of Rs. 40,000, the value of the stockin-trade, cash and cheques, was the property of Kadar Ooran, which should be deemed to pass to the donees only on his death. There is no dispute regarding this either. The Assistant Controller of Estate Duty included the sum of Rs. 31,069 also in the estate left by Kader Ooran and duty was charged on the aggregate. On appeal, the Appellate Controller of Estate Duty was of the opinion that this sum would not form part of the estate left by Kader Ooran and, consequently, reduced the value of the estate by this amount. On farther appeal, the Appellate Tribunal disagreed with the Appellate Controller, reversed the appellate order and restored the order of the Assistant Controller. Then at the instance of the accountable person, the question : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in including in the value of the estate, a sum of Rs. 31,069 which represents the balance in the drawing account of the wife and children of the deceased inclusive of profits ? " has been referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty and a gift by way of settlement. In Halsbury's Laws of England, 3rd edition, vol. 15, page 18, paragraph 34, appears that the property chargeable is the property originally given whether the gift is made by settlement or not. And in the same volume, at page 72, paragraph 146, appears that every estate includes all income accrued upon the property comprised therein down to and outstanding at the date of the death. In Green's Death Duties, 4th edition, page. 416, section 6(5) of the English Finance Act of 1894, which runs : " Every estate shall include all income accrued upon the property included therein down to and outstanding at the date of the death of the deceased" is extracted. Then it is observed : " This provision seems superfluous. Accrued income in respect of property which forms part of the deceased's free estate, or of which he was tenant for life, is itself property of which he was competent to dispose. " In addition to these English authorities, the counsel of the accountable person has drawn our attention to two decisions of Indian High Courts as well. The first decision is of the Assam High Court in Controller of Estate Duty v. Birendra Kumar Sen and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of settlement this principle applied. The English authorities mentioned above seem also to indicate that the same principle might apply to all cases of gift irrespective of the nature of the property, whether cash or otherwise. If that is the legal position, section 34(4) of our Estate Duty Act and section 6(5) of the British Finance Act of 1894 may lose their purpose. Therefore, some line has to be drawn where the Sneddon case ceases to apply and the principle found in section 6(5) of the British Finance Act similar to section 34(4) of the Indian Act starts to apply. The two Indian decisions in Birendra Kumar Sen's case and in Gangadharan Pillai's case, though they are cases under section 10 of the Act, may give some help in laying down a principle in a case like the one before us too. In both those cases, the question considered was whether the donor was entirely excluded from bona fide possession and enjoyment of the property gifted (section 10) ; and it was held that, if the donee used his own capital and effort in the business gifted, the income from such business should not be treated as part of the estate left by the donor. In such cases, the estate left by the decease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f gift. The counsel for the revenue has then brought to our notice one more English decision, viz., Ralli Bros. Trustee Co. Ltd. v. Inland Revenue Commissioners. Mrs. Ralli wanted to take insurance policies in her name and to make a gift of the same to her relations. She wished the Ralli Bros. Trustee Co. Ltd. to be the trustee of the policies. The policies were taken and premia were also paid. Mrs. Ralli died subsequently: and the question arose as to what was the property gifted by her---whether only the premia paid by her or the insurance policies taken in her name. The Chancery Division of the High Court held that, in the circumstances, the property gifted was not merely the premia paid by Mrs. Ralli but the policies taken in her name including the premia paid. This decision indicates that the search must be to find out what was the property gifted by the donor. In the Ralli case, it was the policies that were the subject-matter of the gift and not the premia paid by Mrs. Ralli ; and this case is, therefore, of no help to the revenue, to establish that in every case the totality of the properties including the income thereof should be considered to be the estate left by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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