TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the deceased's relinquishment of his 1/6th share in joint Hindu family immovable properties in favour of his sons amounted to a disposition or gift includible in his estate under sections 9 and 27 of the Estate Duty Act, 1953. (ii) Whether the sums gifted by the deceased and later invested by the donees in firms in which the deceased was a partner were deemed to pass on his death under section 10 of the Estate Duty Act, 1953.
Issue (i): Whether the deceased's relinquishment of his 1/6th share in joint Hindu family immovable properties in favour of his sons amounted to a disposition or gift includible in his estate under sections 9 and 27 of the Estate Duty Act, 1953.
Analysis: Explanation 2 to section 2(15) treats the extinguishment at the expense of the deceased of a right as a disposition made by the deceased in favour of the person for whose benefit the right is extinguished. The relinquishment by the deceased of his share in the joint family property, in favour of his sons and without consideration, therefore answered the statutory definition of disposition and was capable of being treated as a gift for estate duty purposes. As the disposition had been made within two years of death, section 9 was attracted, and section 27 also supported treatment of the transaction as a gift in favour of relatives.
Conclusion: The amount of Rs. 20,667 was includible in the principal value of the estate of the deceased, in favour of Revenue.
Issue (ii): Whether the sums gifted by the deceased and later invested by the donees in firms in which the deceased was a partner were deemed to pass on his death under section 10 of the Estate Duty Act, 1953.
Analysis: Section 10 applies only where the donee does not assume and retain bona fide possession and enjoyment of the property to the entire exclusion of the donor. A gift of money is not rendered incomplete merely because the donee later lends or deposits it with a firm in which the donor is a partner. Money deposited with a firm remains the property of the depositor, and the donor does not thereby regain possession or enjoyment of the gifted amount. The earlier contrary view was overruled, and the donees were held to have retained the gifted amounts to the entire exclusion of the donor.
Conclusion: The amount of Rs. 1 lakh was not includible in the deceased's estate under section 10, in favour of the accountable persons.
Final Conclusion: The reference was answered by including the relinquished share in the estate, but excluding the gifted money invested by the donees in the firms, so the decision was mixed on the two questions referred.
Ratio Decidendi: A relinquishment of a coparcenary share can amount to a disposition by extinguishment of rights under the Estate Duty Act, while a cash gift remains outside section 10 if the donee retains possession and enjoyment to the donor's entire exclusion notwithstanding a later deposit with a firm in which the donor is a partner.
TaxTMI 
