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TMI Blog1980 (4) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... 1964, the deceased gifted to his grandson, Ganesan, 4.66 acres of wet land in one village and 10.05 acres of wet land in another village. The deceased also gifted by settlement deed dated March 28, 1960, 20.20 acres of wet land in favour of one Ramaswamy Chettiar. The donees assumed possession of the lands gifted to them and the pattas for those lands were transferred in the respective names of the donees. The lands were leased out and the income from these lands were periodically credited to the accounts of the donees in the books of the deceased and they were at the disposal of the deceased and utilised by him in his money-lending business. The Asst. Controller came to the conclusion that the deceased had utilised the income from the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them and the pattas for the lands were also transferred in their favour and the donees could have, at any time, prevented the deceased from utilising the income from the gifted lands and the benefit which the deceased had by way of utilising the income from the gifted lands in the money-lending business carried on by him, could not be referable to the gifts made by him and the value of the lands gifted by the deceased to the various persons should not, therefore, be included in the computation of the principal value of the estate under s. 10 of the E.D. Act. The Tribunal, following the decision of this court in Devaki Ammal v. Asst. CED [1973] 91 ITR 24, held that the inclusion of Rs. 15,000 as the value of the lineal descendant's share i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sole name of the deceased till a particular date and thereafter, a joint account was opened in the name of the deceased and his wife. There were also withdrawals both by the husband as well as by the wife. On these facts, it was held that the donee had assumed such possession and enjoyment of the properties as was possible in the circumstances, and that as the donee was in receipt of rents, profits and dividends from the settled properties, the crediting of the amounts in the deceased's bank account would not bring the case within the scope of s. 10 of the E.D. Act. In CED v. Estate of late V. Shyamala Anni [1979] 119 ITR 391 (Mad), the deceased had executed settlement deeds gifting the properties to various relations and the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s gifted to them in the firm in which the deceased was a partner and the sums gifted were being utilised by the. firm and it was held that s. 10 of the E.D. Act is not attracted. The Supreme Court pointed out : " When a property is gifted by a donor the possession and enjoyment of which is allowed to 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 E. D. Act until and unless such enjoyment or benefit is clearly referable to the gift, i.e., 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 possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selves. The fact that the deceased was utilising the income from the gifted properties in the money-lending business is not sufficient for the application of S. 10 of the E.D. Act, unless and until such enjoyment or benefit by the deceased is clearly referable to the gift. Since the possession, enjoyment or benefit of the donor in the property is consistent with the facts and circumstances of the case, other than those of the factum of gift, it cannot be said that the donees have not retained the possession and enjoyment of the property to the entire exclusion of the deceased. Since the benefit which the deceased had by way of utilising the. income from the gifted lands in the money-lending business carried on by him is not referable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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