Estate Duty inclusion failed where a valid gift took effect and the donee had immediate possession and enjoyment.

Lal Godam was examined for inclusion in the dutiable estate under the Estate Duty Act, 1953. The court noted that the trust deed had not been acted upon and that the gift deed was valid and had taken effect. Section 27 was held inapplicable because it only deems certain dispositions to be gifts for Act purposes and did not fit the facts. Section 10 was also held inapplicable because its condition that the donee must not have immediately assumed bona fide possession and enjoyment to the exclusion of the donor was inconsistent with a valid, effective gift. The property was therefore not includible in the principal value of the estate.

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Issues: Whether the value of the property known as Lal Godam was includible in the dutiable estate under sections 10 and 27 of the Estate Duty Act, 1953.

Analysis: The unchallenged finding accepted that the trust deed was not acted upon and that the gift deed was valid and had taken effect. Section 27 was held to have no application on the facts, as it merely deems certain dispositions to be gifts for the purposes of the Act. Section 10 was also held inapplicable because its operation depends on the donee not having immediately assumed bona fide possession and enjoyment to the exclusion of the donor, which was inconsistent with a valid and effective gift.

Conclusion: The property was not liable to be included in the principal value of the estate, and the question was answered in favour of the assessee and against the Revenue.

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