Completed book-entry gift stays outside estate duty where donee retains possession and donor does not resume enjoyment.

A gift completed by transfer entries in the books of account was treated as fully effected when the entries were made, because nothing further remained for the donor to do to divest himself of the money. The gifted amount then stood to the donee's credit and earned interest, and the donor's later association with the business under a family arrangement did not by itself show that the donee had returned the property to the joint family hotchpot or that the donor had resumed possession or enjoyment. On those facts, section 10 of the Estate Duty Act, 1953 was not attracted and the amount was not includible in the deceased donor's estate.

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Issues: Whether the sum of Rs. 1,50,000 transferred by book entries to the donee was liable to be included in the deceased donor's estate under section 10 of the Estate Duty Act, 1953, on the ground that the donor was not excluded from possession and enjoyment of the gifted amount.

Analysis: The gift was effected by transfer entries in the books of account, and the transaction stood completed when those entries were made. Nothing further remained to be done by the donor to divest himself of the money. The amount thereafter remained to the credit of the donee and earned interest. The mere fact that the donor later became associated with the business through the family arrangement did not establish that the donee had brought the gifted amount back into the joint family hotchpot or that the donor resumed possession or enjoyment of the subject-matter of the gift. On the facts found, the donee's control over the gifted amount was not displaced so as to attract section 10.

Conclusion: Section 10 of the Estate Duty Act, 1953 was not attracted, and the gifted amount was not includible in the deceased's estate.

Ratio Decidendi: A gift completed by transfer entries, where the donee retains possession and enjoyment and the donor is not shown to have resumed control or benefit in the subject-matter of the gift, does not fall within section 10 of the Estate Duty Act, 1953.

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