Estate duty exclusion on gifted cash upheld where donor retained no proven benefit from investments made by the son.

Section 10 of the Estate Duty Act, 1953 applies only where the donee does not bona fide assume possession and enjoyment of gifted property immediately and thereafter retain it to the donor's entire exclusion. Cash gifted by the deceased was invested by the son in his own name and the certificates remained in his custody; the fact that interest was sometimes credited to the donor's or a joint account did not, by itself, prove an enforceable or real benefit to the donor. As no evidence showed that the deceased withdrew or used the interest, the burden of proving donor benefit was not discharged, and the amount was held excludable from the principal value of the estate.

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Issues: Whether section 10 of the Estate Duty Act, 1953 applied to gifts of cash made by the deceased to his son where the donee invested the money in his own name and the income from the investments was at times credited to the donor's or a joint bank account.

Analysis: Section 10 applies only if the donee did not bona fide assume possession and enjoyment of the gifted property immediately and retain it thereafter to the entire exclusion of the donor or of any benefit to him by contract or otherwise. The gifted cash was invested by the son in his own name, and the certificates remained in his custody. The mere crediting of interest income, at different times, to the donor's account or a joint account did not by itself establish that the donor enjoyed any enforceable or real benefit from the gifted property. There was no evidence that the deceased withdrew or used the interest, and the burden to show such benefit was not discharged.

Conclusion: Section 10 of the Estate Duty Act, 1953 was not attracted, and the exclusion of the amount from the principal value of the estate was in law. The question was answered in favour of the accountable person and against the Revenue.

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