Current account transfers and estate duty: section 10 turns on whether the gift was cash or an actionable claim.

For estate duty purposes, the applicability of section 10 depends on the real subject-matter of the transfer. A balance standing in the donor's current account is not an actionable claim; if the transfer is truly from a current account, it is treated as a cash-like gift rather than a chose in action. Section 10 may apply where the donee retains possession and enjoyment of gifted money without excluding the donor, especially if the money is later deposited in a firm in which the donor is a partner. The decisive question remains the factual nature of the gift, which must be identified before the estate duty consequence is determined.

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Issues: (i) Whether the gifted amount standing in the donor's books was an actionable claim or a cash gift or transfer from a current account; (ii) whether section 10 of the Estate Duty Act, 1953 applied to the gifted amounts on the facts as found.

Issue (i): Whether the gifted amount standing in the donor's books was an actionable claim or a cash gift or transfer from a current account.

Analysis: The decisive enquiry is the true subject-matter of the gift at the time of transfer. If the amount represented an existing balance in the nature of an actionable claim, compliance with the Transfer of Property Act would be necessary and the donee's holding would be subject to the relevant rights arising from that claim. If the amount was a cash gift, the donee's receipt and later deposit with the firm would not alter the unconditional character of the transfer. A current account, being repayable on demand and not merely a chose in action of the kind contemplated for an actionable claim, stands in a different category from a capital, loan, or profit account.

Conclusion: The subject-matter of the gift must be determined on the facts, and a transfer from a current account would be treated as a cash-like transfer rather than an actionable claim.

Issue (ii): Whether section 10 of the Estate Duty Act, 1953 applied to the gifted amounts on the facts as found.

Analysis: Section 10 turns on whether the donee retained possession and enjoyment of the gifted property to the entire exclusion of the donor. Where the gift is of cash and the amount is subsequently deposited in a firm in which the donor is a partner, the absence of any reservation in the gift supports application of section 10. Where, however, the transfer is of an actionable claim, the donor may be completely excluded from the subject-matter and section 10 would not apply. The authorities cited show that the legal result depends first on identifying whether the transfer was of cash, a current account balance, or an actionable claim.

Conclusion: The applicability of section 10 could not be finally decided without first ascertaining the nature of the gift, and the matter was sent back for that factual determination.

Final Conclusion: The reference was answered by laying down the governing legal distinction, but the assessment issue was left to be worked out afresh on the factual finding whether the transfer was from a current account, a cash gift, or an actionable claim.

Ratio Decidendi: For estate duty purposes, the applicability of section 10 depends on the real subject-matter of the transfer; a transfer from a current account is not an actionable claim and attracts section 10 as an unconditional gift of money, whereas a transfer of an actionable claim does not.

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