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Issues: Whether the sum of Rs. 15,000 gifted by the deceased to his son and later invested in the father's business partnership was includible in the principal value of the estate under section 10 of the Estate Duty Act, 1953.
Analysis: Section 10 applies only if the donee has bona fide assumed possession and enjoyment of the gifted property and has retained it to the entire exclusion of the donor or any benefit to him. The facts showed a completed gift of cash out of the proprietary concern, followed by the donee's voluntary decision to leave the money in the business and earn interest. The subject-matter of the gift was not an actionable claim but cash, and the donor thereafter enjoyed the use of that very money in his business. The later use of the money by the father was referable to the gifted property itself and not to any reserved condition at the time of the gift.
Conclusion: Section 10 was attracted, and the amount of Rs. 15,000 was includible in the principal value of the estate; the question was answered against the accountable person and in favour of the Revenue.
Ratio Decidendi: Where a completed cash gift is thereafter retained in the donor's business and the donor continues to enjoy the use of the gifted money, the donee cannot be said to have retained possession and enjoyment to the entire exclusion of the donor, so section 10 of the Estate Duty Act applies.
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