Section 10 estate duty rule: gifted property stays in the deceased's estate when donor retains benefit and control.

Gifted house properties were liable to be included in the deceased's estate under section 10 of the Estate Duty Act, 1953, because the donees did not immediately assume bona fide possession and enjoyment to the entire exclusion of the donor. The properties continued in the donor's name, no mutation was effected, the donor lived with the family in the same house, and rental income was used for family expenses, including the donor's. Those facts showed that the donor retained benefit from the properties, so the statutory exclusion for gifted property was not satisfied and the deeming provision applied.

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Issues: Whether the gifted house properties 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 immediately assumed possession and had not retained the properties to the entire exclusion of the donor.

Analysis: Section 10 applies where the donee does not immediately assume bona fide possession and enjoyment of the gifted property and retain it thereafter to the entire exclusion of the donor and of any benefit to him by contract or otherwise. The evidence showed that the properties continued in the donor's name, no mutation was effected, the donor lived with the family in the same house, and the rental income was used for family expenses, including those of the donor. Those circumstances established that the donor was not entirely excluded from the benefit of the properties and that the donees had not enjoyed exclusive possession and enjoyment from the date of the gift.

Conclusion: The properties were rightly brought within section 10 and were includible in the estate of the deceased. The answer was therefore in the affirmative, against the assessee.

Ratio Decidendi: For exclusion of gifted property from the estate under section 10 of the Estate Duty Act, 1953, the donee must immediately assume and thereafter retain bona fide possession and enjoyment of the property to the entire exclusion of the donor and of any benefit to the donor; failure of any part of this requirement attracts the deeming provision.

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