Partial inclusion under estate duty applies only to the gifted property portion retained or enjoyed by the donor.

Section 10 of the Estate Duty Act, 1953 was construed to mean that, where gifted property was not bona fide possessed and enjoyed by the donee to the entire exclusion of the donor, estate duty could attach only to the part or fraction affected by the donor's retained benefit. The phrase "to the extent" was read as limiting inclusion in the dutiable estate to the portion actually enjoyed or occupied by the donor, rather than the whole gifted share. The cited Supreme Court-approved view on partial inclusion was applied, and the question was answered in favour of the accountable person.

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Issues: Whether, on a proper construction of section 10 of the Estate Duty Act, 1953, only the part of the gifted property not bona fide possessed and enjoyed by the donee to the exclusion of the donor could be deemed to pass on the donor's death.

Analysis: Section 10 applies where gifted property is not immediately assumed in bona fide possession and enjoyment by the donee and retained to the entire exclusion of the donor or any benefit to the donor. The phrase "to the extent" was read as restricting liability to estate duty to that part or fraction of the property in which the donor retained an interest or from which the donee did not obtain complete exclusion of the donor. The earlier Calcutta view was approved by the Supreme Court, which held that estate duty is chargeable only on the part or fraction of the gifted property affected by the donor's retained benefit or continued enjoyment.

Conclusion: Only the portion of the gifted property actually occupied or enjoyed by the donor, and not the whole gifted share, was liable to be included in the dutiable estate. The question was answered in favour of the accountable person.

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