Section 10 estate duty applies only on actual donor enjoyment or benefit, not mere possibility of use.

Section 10 of the Estate Duty Act, 1953 applies only where gifted property is enjoyed by the donor or the donor is not effectively excluded. The donees here immediately took possession of the gifted lands and retained them in their own right, while the evidence did not show any actual enjoyment, benefit, or use by the deceased. Mere crediting of sale proceeds in accounts in the donees' names, without proof that the deceased enjoyed the income or property, was insufficient. Section 10 therefore did not apply, and the gifted properties were not liable to be brought into the estate.

---

---

Issues: Whether section 10 of the Estate Duty Act, 1953 applied to the gifts made by the deceased so as to treat the gifted properties as deemed to pass on death.

Analysis: The donees were found to have immediately assumed possession of the gifted lands and to have retained them in their own right. The evidence did not show that the deceased had any actual enjoyment of the gifted properties or derived any benefit from them. Mere crediting of sale proceeds in accounts maintained in the names of the donees, without proof that the deceased enjoyed the income or the properties, was insufficient. Section 10 requires bona fide possession and enjoyment by the donee and actual exclusion of the donor, and not a merely notional or potential possibility of use by the donor.

Conclusion: Section 10 did not apply, and the addition made by the revenue was not sustainable.

Final Conclusion: The reference was answered in favour of the accountable person, and the gifted properties were not liable to be brought into the estate under section 10.

Ratio Decidendi: For section 10 of the Estate Duty Act, 1953 to operate, there must be evidence of actual enjoyment or benefit by the donor; mere custody of income or the possibility of appropriation does not amount to non-exclusion of the donor.

---