Estate duty on benami property and converted gifted cash depends on the exact gifted asset and retained enjoyment

Section 6 of the Estate Duty Act applies only where the deceased was competent to dispose of the property at death, so benami property standing in another's name was outside its scope because the beneficial owner could not transfer it without a court declaration. Section 10 applies only to the very property gifted, where the donor retained bona fide possession or enjoyment of that gifted property; it does not extend to a house later constructed from gifted cash. The second proviso to section 10 was also inapplicable because it was not retrospective and the deceased had died before it came into force. The Kanpur property was therefore not includible in the estate.

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Issues: Whether the Kanpur property was includible in the deceased's estate under section 6 or section 10 of the Estate Duty Act.

Analysis: Section 6 applies only where the deceased was competent to dispose of the property at death. Property standing benami in another's name is not within that description because the beneficial owner cannot dispose of it without first obtaining a declaration from a competent court. Section 10 applies only to property that itself was the subject-matter of the gift and in respect of which the donor did not retain bona fide possession and enjoyment. Here, the gift was of cash, and the house was later constructed from that cash; the house was not the gifted property. The second proviso to section 10 was also inapplicable because it was not retrospective and the deceased had died before it came into force.

Conclusion: The Kanpur property was not includible in the deceased's estate, and section 10 did not apply. The question was answered in favour of the accountable person.

Ratio Decidendi: Section 10 of the Estate Duty Act applies only to the very property gifted by the deceased, with retention of possession or benefit in that gifted property; it does not extend to property newly brought into existence by conversion of gifted cash into another asset.

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