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TMI Blog1981 (3) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of account maintained by him for his hardware business and were given to the donees. After some time, the amounts were deposited by the donees with the deceased and the deceased had made some corresponding credit entries, each for Rs. 10,000 in favour of his two daughters. At the time when, the gifts were made and Also at the time when these were received back by the deceased, the deceased was the sole proprietor of his business. The business was subsequently converted into one of partnership by the admission of the two sons of the deceased. On the ground that the amounts gifted came to the possession of the deceased and thus he was not entirely excluded from possession and enjoyment of those amounts, the Asst. Controller of Esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deceased was a partner, for use as godown on a monthly rent of Rs. 150. The value of the house was estimated at Rs. 50,000 and, on the ground that the donee had not retained possession of the same to the entire exclusion of the donor, the entire value was included for the purpose of estate duty by the Asst. Controller. The Appellate Controller held that the value of the house had to be determined only by capitalising the rent received by the donee and, on that method of valuation, determined the value at Rs. 36,000. However, he agreed with: the Asst. Controller that this sum of Rs. 36,000 has to be included for the purposes of estate duty. The Tribunal also agreed with this view. Learned counsel for the accountable person questioned the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partnership firm in which the donor is a partner, then the mere fact of the donor sharing, the enjoyment or the benefit in the property is not sufficient for the application of s. 10 of the Act until and unless such enjoyment or benefit is clearly referable to the gift, that is, to the parting with such enjoyment or benefit by the donee or permitting the donor to share them out of the bundle of rights gifted in the property. If the possession, enjoyment or benefit of the donor in the property is consistent with the other facts and circumstances of the case other than those of the factum of gift, then it cannot be said that the donee had not retained the possession and enjoyment of the property to the entire exclusion of the donor, or to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire exclusion of the donor. It was by applying these two tests, that it was held in that judgment that even though the sum of Rs. 1,50,000 received as gift from the deceased was invested in the firm in which the deceased was a partner, the possession or enjoyment or the user of the money so deposited by the deceased was not referable to the gift itself, and on those grounds, s. IO was hold not applicable. So far as the gifts of Rs. 10,000 each to the daughters this case are concerned, the facts are almost identical with the facts in the case before the Supreme Court. The investment of the money in the sole proprietary concern of the deceased or the retaining of the sum even after the business was converted into one of partnership could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r understanding that came to be arrived at between the donor and the donees at the time when the gifts were made or simultaneous to the gifts or part of a series of transactions, which we may call as forming one group linking or having reference to the gifts themselves. The learned counsel for the revenue, however, contended that it is not necessary, in order to bring the transaction within the later portion of s. 10, that the understanding or contract should have been simultaneous or should have reference to the gift itself, and that, the decision of the Supreme Court is on facts one relating to the first limb of s. 10 and was not concerned with the later portion of s. 10. The Supreme-Court, in the passage which we have extracted earlier, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not applicable to any of the three types of transactions in this case. We, accordingly, answer the following three questions referred to us in the negative and against the revenue. " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the inclusion, under section 10 of the Estate Duty Act in the assessment made, of gifts aggregating to Rs. 20,000 made by the deceased to his daughters on February 9, 1962, and February 27, 1962. (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the inclusion, under s. IV of the Estate Duty Act in the assessment made, of the value of lands amounting to Rs. 1,03,640 gifted by the deceased to his sons ? ..... X X X X Extracts X X X X X X X X Extracts X X X X
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