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TMI Blog1979 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... gifted by the deceased to his sons and grandsons was includible in the estate of the deceased by virtue of section 10 of the Estate Duty Act ? 3. Whether, on the facts and in the circumstances of the case, a sum of Rs. 31,580 being the value of 6% share in the goodwill of the firm of M/s. Amubhai Mulchand held by the minor, Sharadkumar, was includible in the value of the estate of the deceased by virtue of section 10 of the Act ? " As far as question No. 1 is concerned, it is unnecessary to consider the same, because it is common ground that it is completely covered by question No. 2. As far as question No. 2 is concerned, it is again, agreed between Mr. Joshi and Mr. Pandit that this question must be answered in favour of the accountab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een disputed by the accountable person throughout that the said firm possessed goodwill and the value of 6% share in the goodwill amounted to Rs. 31,580. The decision of the Assistant CED was upheld by the Appellate Controller and the accountable person then preferred an appeal to the Income-tax Appellate Tribunal. The said appeal was allowed by the Tribunal and it was held by the Tribunal that the said amount of Rs. 31,580 was not liable to be included in the estate of the deceased under s. 10 of the said Act. Before going into the contentions raised before us, it will be useful to take note of the provisions of s. 10 of the said Act, which runs as follows : " Property taken under any gift, whenever made, shall be deemed to pass on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties Act, 1920-56, which are in pari materia with the provisions of s. 10 of the said Act. The ratio of that decision has been explained by the Supreme Court in CED v. Kamlavati and CED v. Jai Gopal Mehra (Civil Appeals Nos. 2527 and 2528 of 1972, decided on 5th September, 1979) [1979] 120 ITR 456 at p. 460 as follows : "........ the ratio in Chick's case [1959] 37 ITR (ED) 89; 3 EDC 915 (PC) is that if the donor is allowed to be in possession and enjoyment of or derive any benefit out of the property gifted then section 10 of the Act will make such property dutiable. If, on the other hand, the donor's possession, enjoyment or benefit is not relatable to the property gifted but to something outside it then no estate duty is chargeable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property gifted. Looking at the matter from a slightly different point of view, what was gifted to Sharadkumar was a six paise share in the said partnership subject to the terms and conditions of the partnership one of which at the relevant time was that the deceased continued to have a 6% share therein as a partner in the said partnership. It was, therefore, the case of a gift of property shorn of certain rights which continued to remain with the deceased and hence the ratio of the decision in Chick's case [1959] 37 ITR (ED) 89; 3 EDC 915 (PC) had no application to this case at all. It was observed by the Supreme Court in CED v. R. V. Viswanathan [1976] 105 ITR 653 at page 665 : " No benefit of any kind was enjoyed by way of possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It was held by the Supreme Court that the transfer of Rs. 45,000 by book entries in favour of each of the four major sons on September 12, 1955, and in favour of each of the minor sons on September 18,1955, the execution of the partnership deed on September 17,1955, and of the other agreement on September 18, 1955, were all parts of one integrated transaction, the object of which was to bring about transfer of six-sevenths share of the deceased in his business in favour of his sons so that he and his sons might have each one-seventh share therein. It was further held that there was no absolute transfer of the sum of Rs. 2,70,000 but the transfer was made subject to the condition that the sons would use it as capital not for any benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that the deceased was not entirely excluded from the possession and enjoyment of the subject-matter of the gift. It was held by a Division Bench of the High Court of Assam and Nagaland that the Tribunal was justified in holding that the donor was entirely excluded from the possession and enjoyment of the subject-matter of the gift, viz., a half share of the partnerships business, and, accordingly, the provisions of s. 10 of the said Act were not attracted. In our view, question No. 3 must also be answered in favour of the accountable person. In the result, we answer the questions referred to us as follows : Question No.1--We decline to answer this question for the reasons which we have already given. Question No. 2-In the neg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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