Estate Duty section 10 requires exclusive donor exclusion; husband's continued residence after a bona fide gift did not attract inclusion.

Section 10 of the Estate Duty Act applies only where the donee retains possession and enjoyment of gifted property to the entire exclusion of the donor. A bona fide gift of a residential house to the wife was not brought back into the estate merely because the husband continued to live there after the gift. His presence was attributable to the marital relationship, not to any retained proprietary enjoyment or possession. On that construction, the gifted house was not includible in the principal value of the estate passing on death.

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Issues: Whether, on the facts of the case, section 10 of the Estate Duty Act, 1953 was attracted so as to include the value of the residential house gifted by the deceased to his wife in the principal value of the estate passing on death.

Analysis: Section 10 applies only where the donee retains possession and enjoyment of the gifted property to the entire exclusion of the donor. The continued residence of the husband with the wife in the residential house, after a bona fide gift of the house to the wife, does not mean that the husband remained in possession or enjoyment of the property. The wife, as donee, retained possession and enjoyment, and the donor's presence in the house was referable to the marital relationship and not to any retained proprietary enjoyment by him. The contrary view would lead to an unreasonable construction of the section and was not accepted.

Conclusion: Section 10 was not attracted, and the value of the residential property was not includible in the estate.

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