1975 (7) TMI 16

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....re than two years before his death, could be included in the dutiable estate under section 10 of the Estate Duty Act ? " The facts giving rise to the question may be stated : One Govind Shamji, who carried on money-lending business at Bombay, purchased on July 25, 1951, and January 14, 1953, Government securities of the face value of Rs. 50,000 in the joint names of himself and his wife. On October 24, 1951, and June 26, 1952, he also purchased Government securities of the face value of Rs. 50,000 in the names of his two minor sons by himself as their guardian. On March 22, 1954, he made a declaration on oath before the Presidency Magistrate that he had purchased those securities with the intention of gifting them to his wife and sons an....

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....f the deceased. The Appellate Controller of Estate Duty to whom the accountable person preferred an appeal confirmed the order of the Assistant Controller of Estate Duty and upheld the inclusion of the value of the securities in the dutiable estate. In further appeal that was preferred by the accountable person to the Appellate Tribunal it was argued that the deceased was also doing commission business and that as commission agent he recovered the amount on the securities on behalf of the minors through his bank account and subsequently those amounts were withdrawn before the death of the deceased and part of it was invested with an outside firm. It was further argued that interest that was received was actually credited to the account of t....

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....donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. In order to avoid the mischief of section 10 it must be established that the donee not only assumed bona fide possession and enjoyment of the property taken under a gift but also thenceforward retained it to the entire exclusion of the donor or of any benefit to him by contract or otherwise. Having regard to the facts that have been found by the Tribunal in this case, it would be difficult to say that the provisions of section 10 are attracted to the facts of the case. It has been found by the Tribunal that the deceased had made bona fide gifts of the securities worth Rs. 1 lakh to his wife and minor children. The corp....