9911796707
TMI Blog1971 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... of the deceased ? " In his application for reference the Controller of Estate Duty required the following question also to be referred : " Whether, on the facts and in the circumstances of the case, the. Tribunal had sufficient material to hold that the value of the arecanut plantation has to be deleted from the principal value of the estate ? " The Income-tax Appellate Tribunal refused to refer the above question as in its view it is not a question of law. Counsel for the revenue has filed C.M.P. No. 10381 of 1971 requesting this court to raise the above-mentioned question also as it involves a question of law arising out of the order of the Tribunal and answer the same along with the question referred by the Tribunal. Since counsel for the accountable person has serious objection to the course suggested by the revenue we shall deal with the petition in due course. The reference relates to the estate duty in respect of the estate left behind by A.W. Leslie who died on September 29, 1960. He was the absolute owner of two tea estates by name Shendurini and Linwood. By the deed of gift dated 20th July, 19 54, annexure " A ", he gifted 1/10th share in the above estates to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication to the facts of the case and deleted the inclusion of the value of 7/10ths shares given to the sons as part of the estate of the deceased. The question for consideration is whether, in view of the terms of the gift, annexure " A ", and the partnership deed, annexure " B ", section 10 of the Estate Duty Act, 1953, is attracted. Section 10 of the Estate Duty Act, 1953, reads as follows : " 10. Gifts whenever made where donor not entirely excluded.-Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise : Provided that the property shall not be deemed to pass by reason only that it was not, as from the date of the gift, exclusively retained as aforesaid, if, by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the donor or of any benefit to him for at least two years before the death : Provided further that a house or part thereof taken under any gift ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts, the Madras High Court observed : " Once it is clear, as we mentioned earlier, that the section is exclusively confined to the subject-matter of the gift, that should clear any confusion or difficulty in the way of its application to such set of facts. Notwithstanding the fact that the donor and the donee are in possession and enjoyment of the entirety of the property as co-owners, the application of the section will have to be determined by asking whether the donor, so far as the subject-matter of the gift is concerned in such a case, has had any benefit from out of or in respect of it. If the answer is in the negative the section will have no application. The test for application of the section in such a case will not be whether the donor as a co-owner was in possession of the entirety of the property, for, where property is owned in tenancy-in-common, each is in law deemed to be in possession of the whole. " The above observations certainly support the assessee. The Judicial Committee in Commissioner for Stamp Duties of New South Wales v. Perpetual Trustee Co. Ltd. had to interpret section 102(2)(d) of the New South Wales Stamp Duties Act, 1920, couched in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e donor and any benefit to him by contract or otherwise is that which is truly given, a proposition which is obvious enough in the case of two separate estates, but more difficult to follow and apply where trusts are declared of a single property which are not completely exhaustive in favour of a donee. It should at least be clear from the judgment of Lord Russell of Killowen that by retaining something which he has never given a donor does not bring himself within the mischief of the section. I venture to repeat in other words what I have already said when dealing with section 43 alone, for its underlying principle is not altered by an alliance with section 56. In the simplest analysis, if A gives to B all his estates in Wiltshire except Blackacre, he does not except Blackacre out of what he has given : he just does not give Blackacre. And if it can be regarded as a 'benefit' to him that he does not give but keeps Blackacre, it is a benefit which is in no relevant sense (to use the language of Lord Tomlin) 'referable' or (to use that of Lord Russell of Killowen) 'attributable' to the gift that he made of the rest of the Wiltshire estate." The next case to which we would like to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retained such possession and enjoyment to the entire exclusion of any benefit to the deceased." It is thus clear that the donees assumed bona fide possession and enjoyment of the subject-matter of the gift immediately thereafter and hence thenceforward retained the same to the exclusion of the donor. The next submission on behalf of the revenue was that, on account of annexure " B ", the second limb of the second part of section 10 has not been satisfied. We cannot agree. As a result of the partnership no material benefit was retained by the deceased in the shares gifted to the sons. The fact that the deceased was made the managing partner is not sufficient to constitute a " benefit " within the meaning of section 10 of the Estate Duty Act, 1953. No remuneration was given to him under the terms of the partnership. It has not also been proved that any remuneration was in fact paid to the father as managing partner. The terms of the partnership provide for his getting only or being liable for 2/10ths share in the profit or loss of the partnership. We are, therefore, satisfied that there was no retention of benefit by the deceased over the interest gifted on account of the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with that question the Bombay High Court observed thus : " Having read in detail section 66 of the Indian Income-tax Act, it appears to us that the objection of the Commissioner is proper. It is not right to allow parties to rush to court and invite it to ask the Tribunal to send a further statement of facts, or to submit a question of law, before the court has an opportunity to consider the case actually submitted by the Tribunal for its consideration. It seems to us that the most convenient way to deal with the situation is this. When a statement of case, with the question of law framed by the Tribunal, is filed in court for disposal, if a party is aggrieved and wants to contend that certain further facts ought to be stated, or certain questions of law should be raised, he can make an application by way of notice of motion. That should be heard along with the case stated by the Tribunal for the court's opinion. At that time, the court will consider whether the statement of case is complete for the question of law raised by the Tribunal. The court can also consider whether on the case stated by the Tribunal the proper question is raised or not. That is the proper time for an a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
