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TMI Blog1969 (7) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... of Purnabai. The argument that fixed deposit receipts had remined exclusively in the possession of Satyanarayana as guardian of Suryakant and they were obtained by him from Purnabai for the purpose of renewal is not supported by any evidence. There is also no evidence that in obtaining the receipts in the joint names Purnabai acted as a guardian of Suryakant nor that the was a benamidar of Suryakant. We are of the view that the High Court was right in answering the question against the appellant. - - - - - Dated:- 31-7-1969 - Judge(s) : J. C. SHAH., A. N. GROVER., V. RAMASWAMY JUDGMENT The judgment of the court was delivered by SHAH, Ag. C. J.--Purnabai, widow of Sagarmal Mody, held on April 1, 1953, three deposit receipts of the aggregate face value of Rs. 6,26,724-14-0 with the State Bank of Bikaner. By her letter dated July 22, 1952, Purnabai informed the bank that she intended to make a gift of the amounts of two out of the three receipts to Suryakant, son of her adopted son, Satyanarayana, and requested that the receipts be renewed for three months in the joint names of "Purnabai Sagarmal Mody and/or Surya Kant S. Mody--payable to either or survivor," and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he joint names of Purnabai and Suryakant. After the death of Purnabai on February 15, 1956, the two receipts were encashed by Suryakant. The Assistant Controller of Estate Duty, in proceedings for assessment of estate duty, held inter alia that possession and enjoyment of the gifted property was not assumed by the donee to the entire exclusion of the donor, and on that account the amount of the two receipts and interest thereon formed part of the estate of Purnabai and was liable to estate duty. Regarding the third receipt for Rs. 80,931-10-0 the Assistant Controller observed that, even though the earlier receipt was discharged on August 25, 1955, i.e., within two years of the death of Purnabai and the amount was invested in the name of Suryakant, by virtue of the provisions of the Estate Duty Act, the amount held in the name of Suryakant alone was, for assessment of estate duty, liable to be included in the estate of Purnabai. In appeal the Central Board of Revenue confirmed the order. The Board held that at all material times during the currency to the fixed deposit Purnabai had the right to receive the money from the bank by giving discharge for the same and that whenever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther I would like to state that now Suryakant S. Mody is the sole owner of the above fixed deposit receipts in question till Suryakant S. Mody attains majority the receipts should remain in joint names as it stands now." It is clear that Purnabai desired to make a gift of the amount repre sented by the previous deposit receipts and did in fact execute a deed of gift. The bank had notice of the gift deed. Counsel for the appellant contends that Purnabai did everything possible to divest herself of her interest in the money held by her, in deposit with the bank, and retained no interest therein and that in obtaining renewal of the receipts in the joint names of herself and of Suryakant, she was merely a benamidar and in any event was acting on behalf of Suryakant. Counsel further contends that the bank having notice of the gift could not have parted with the money except only for the benefit of the minor and by obtaining renewal of the receipt in favour of the minor, Suryakant, and Purnabai, the latter retained no possession or enjoyment of the money represented by the receipts. Counsel invited our attention to a decision of the Madras High Court in Imperial Bank of India v. S. Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10 of the Estate Duty Act, 1953 (34 of 1953). Section 10 of that Act provides : "Property taken under pay gift, whenever made, shall be deemed to pass on the donor's death to the extent that bonafide 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 ; ..." The phraseology of the section is somewhat involved. The purport of the section is, however, clear. The section clearly means that if in respect of any property which is gifted, bona fide possession and enjoyment is not immediately assumed by the donee and thenceforward retained by him to to entire exclusion of the donor or of any benefit to him therein the property gifted shall not be excluded from the estate subject to estate duty. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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