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TMI Blog1979 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... lutely. She had no male issue. She had only a daughter and grand-children apart from a brother and sister. She executed settlement deeds on various dates between 6th January, 1949, and 12th March, 1960, by which she gifted to the various persons, that is, her brother, sister, son-in-law, daughter, grand-children and a school, properties consisting of agricultural lands to the extent of 234 acres, 49 cents wet, and 12 acres and 60 cents dry. For our present purpose, it is unnecessary to refer to the details of the various gifts made by her to the several persons or entities mentioned already. The daughter of the deceased filed a return under the E.D. Act. In the course of assessment, the question arose as to whether the several gifts or settlements would come within the scope of s. 10 of the E.D. Act. The lands were mostly under pannai cultivation and some of them had been leased. The rent deeds executed in favour of the donees by the various tenants in respect of the lands settled on the donees were produced before the estate duty authorities. The donees had been assessed to agricultural income-tax, and the pattas in respect of the lands had already been transferred in their favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that the deceased was not entirely excluded from the properties, so as to get out of the operation of s. 10 of the Act. He cited various decisions in support of this contention. On behalf of the accountable person, the learned counsel submitted that this is a case in which there was no evidence of any actual enjoyment of the properties gifted so that s. 10 of the Act could be brought into operation. In the submission of the counsel, in the absence of any finding to show that the deceased was in actual enjoyment of any part of the properties gifted, there would be no scope for applying s. 10 of the Act. Section 10 of the Act is one of the provisions that has come in for scrutiny of the courts on numerous occasions. To the extent relevant for our purposes, it runs as follows : " 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 :......" There are two provisos to the section, but it is unnecessary to go into them for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is thus no evidence to support the finding of the lower authorities that the deceased had the benefit of income derived from the gifted lands. It has been observed by the lower authorities that but for the availability of the funds, the deceased could not have met the cost of construction of the Shyamala Anni Girls' High School building. This again is not based on any evidence and is a mere surmise. The lower authorities have not given any material for drawing such an inference. Thus, there is absolutely no evidence to show that the deceased had the benefit of the income derived from the gifted properties. " The finding given above rules out the application of s. 10. The learned counsel for the revenue submitted that from the mere fact that the sale proceeds of the paddy were credited in the accounts of the deceased, though in the folios of the respective donees, it would be clear that the deceased could enjoy the money so credited and that, therefore, the provision would be attracted. This aspect has been gone into in two decisions of this court. In M. Ranganatha Sastri v. CED [1966] 60 ITR 783 (Mad), a Hindu husband lived with his wife in a house gifted by him to his wife, coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope of s. 10 of the Act. At p. 542, it was observed : " The mere existence of the bank account of the deceased and the deposits made therein do not, in our opinion, show that the donee had not retained possession and enjoyment of the properties gifted to the entire exclusion of the deceased. If the revenue authority has to succeed on this aspect, some materials should have been placed before us to show that the deceased enjoyed the said income." In the same case at page 543 it was further observed : " The deposit of the income into the individual account of the donor or in a joint account with him without the donee evincing any intention to make them over to the donor absolutely would not lead to the inference that she did not intend to retain the possession and enjoyment of the gifted properties exclusively to herself. " The principle set out above would apply here. Essentially whether the deceased was excluded from enjoyment or not is a question which is capable of decision only by reference to facts. There must be some evidence, circumstantial or otherwise, that there has been an enjoyment of the gifted property by the deceased. A joint account in which the moneys of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply. The learned counsel for the revenue relied on in support of his contention that s. 10 was attracted, on a passage from Green's Death Duties (seventh edn.), page 140, which reads as follow : " Exclusion from possession, etc.--This condition is not satisfied if, within the statutory period, the deceased in fact had some measure of possession or enjoyment of the gifted property, however he came to acquire it. It is immaterial for this purpose whether or not he had any enforceable right to possession and enjoyment ; he may, for example, merely have been allowed by the donee to occupy, or to receive the income of, the gifted property. Nor is it necessary that the deceased's non-exclusion should have commenced at, or been continuous from, the time of the gift ; the condition is not satisfied if the deceased, though entirely excluded at the outset, subsequently, with the concurrence of the donee, reassumed a measure of possession and enjoyment ". From this passage, the learned counsel sought to build an argument that a possibility of appropriation of the amount would be enough to bring into operation s. 10. The authorities of this court as well as of the Supreme Court do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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