Estate duty inclusion under Section 10 fails where donees bona fide assume possession and the donor retains no benefit referable to the gift.

Section 10 of the Estate Duty Act applies only where the donee does not bona fide assume possession and enjoyment on the gift and does not retain it to the donor's entire exclusion. A benefit kept by the donor must be referable to the gift itself, not to an independent right or relationship. On the stated facts, the house property was effectively transferred, the tenant relationship was attorned to the sons, and the donor's position as a partner did not amount to a retained benefit from the gift. The cash gift was credited to the sons' accounts and became payable to them with interest, so no includible benefit was shown.

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Issues: Whether the property transferred to the sons and the sum of Rs. 1 lakh credited to their accounts were liable to be included in the deceased's estate under section 10 of the Estate Duty Act, 1953, on the ground that the donees had not bona fide assumed and retained possession and enjoyment to the entire exclusion of the donor or of any benefit to him.

Analysis: Section 10 applies only when the donee does not bona fide assume possession and enjoyment immediately on the gift and does not retain it to the entire exclusion of the donor. The exclusion requirement is satisfied where the donor has divested ownership and the possession or benefit retained by him is not referable to the gift itself but arises independently, such as from his own separate rights. On the facts, the house property was validly transferred, the firm attorned to the donees as tenants, and the donor's position as a partner did not constitute a benefit referable to the gift. Likewise, the cash gift was credited to the sons' accounts and became payable to them with interest, so the donor was not shown to have retained any benefit in the gifted money within the meaning of the section.

Conclusion: The property and the sum of Rs. 1 lakh were not includible in the deceased's estate under section 10.

Ratio Decidendi: For estate duty under section 10, the donor's retained benefit must be one referable to the gift itself, and not a benefit arising from an independent right or relationship unconnected with the gift; where the donees have bona fide assumed and retained possession and enjoyment to the extent permitted by the nature of the property, the gift is outside the charge.

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