TaxTMI 
TaxTMI 
1967 (4) TMI 42
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....n three equal annual instalments. The respondent, who is the son of the deceased and the accountable person of the estate, contended before the Deputy Controller of Estate Duty that, out of the aforesaid sum of Rs. 10,00,000 due from the Government of Bombay, a sum of Rs. 9,00,000 was gifted to him by the deceased on May 3, 1955, and, therefore, the amount should not be included in the estate of the deceased. In support of this claim, the respondent produced before the Deputy Controller a photostat copy of a letter dated May 3, 1955, addressed by the deceased to the respondent. The Deputy Controller rejected the contention of the respondent, holding that the letter dated May 3, 1955, did not amount to a transfer of an actionable claim but that the gift was legally completed only on September 19, 1955, when the deceased intimated to the Government of Bombay his intention to make the gift to the respondent. The Deputy Controller accordingly held that the amount of Rs. 9,00,000 must be deemed to have passed to the respondent on the death of the deceased under section 9 of the Estate Duty Act, 1953, and as the gift was made within two years of the death of the deceased, it was chargeab....
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....ased dated May 3, 1955, itself effected the gift and the amount of Rs. 9,00,000 was not liable to be included in the estate of the deceased for the purpose of estate duty. The High Court held that the provisions of section 130 of the Transfer of Property Act applied to the case and the letter dated May 3, 1955, manifested clearly the intention of the deceased to make the gift of Rs. 9,00,000 to the respondent and that intention was sought to be carried out and effected by that letter. The High Court accordingly answered the question in favour of the respondent. Section 130 of the Transfer of Property Act is to the following effect : " (1) The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not : Provided that every dealing with the debt or other actionable cl....
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...., I discussed and told you that, the interest of that sum from any good investment we made, will go towards the allowance, I am paying you every month. In other words, like I am paying you from the monthly rent income of the shops, buildings, etc., you know after deducting the rent, I pay the remaining sum of your monthly allowance. In the same way I suggested the new interest or such other income from this palace money also. I had been thinking since some time of avoiding any complication or brain work and within every consideration of my age, life and everything, it would be less troublesome for me and for you if I took another lac from the palace money and gave you Rs. 9,00,000 with no restriction or arrangement. I will continue to pay the monthly allowance after deducting the rent as I am doing today. You can do, what you like with your Rs. 9,00,000 and I have no worry to discuss your investments. If I live five years more, you will have got back that Rs. 1,00,000 safely and you have lost nothing, but if something goes wrong with me then, you may lose fifty thousand or less or more. I think this will be the best thing to do and I will have no interference or worry or both....
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....uble and anxiety the deceased would have to undergo for investing the amount in proper securities, the deceased would hand over the corpus to the respondent without any restrictions or without any conditions, and (2) instead of paying the entire amount of Rs. 10,00,000, the deceased would retain Rs. 1,00,000 therefrom and hand over the balance of Rs. 9,00,000 " without any restrictions or arrangement ", so that " you can do what you like with your Rs. 9,00,000 and I have no worry to discuss your investments ". But there is nothing in the letter to suggest that the deceased was making a transfer of the amount of Rs. 9,00,000 in praesenti to the respondent. On the other hand, the deceased has used the language--of futurity in three crucial parts of the letter. After stating that he had come to the decision about handing over the sum of Rs. 9,00,000 to the respondent without any restrictions or arrangement, the deceased proceeded to state as follows : ".... if I took another lac from the palace money and gave you Rs. 9,00,000 with no restriction or arrangement. I will continue to pay the monthly allowance after deducting the rent as I am doing today." The use of the word " if " ....
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.... time in May, 1955, I was called by His Late Highness at his residence in Bombay and he told me that he had made a gift to his son Iqbal, the present Nawab of Palanpur, of a sum of Rs. 9 lakhs, out of the sum of Rs. 10 lakhs, being the balance of the purchase price of the said Joravar Palace which was due and payable by the State of Bombay. Learned counsel also referred to the draft of two letters dated May 13, 1955, produced along with the affidavit of Mr. Thacker. But it is admitted for the respondent that the deceased did not sign either of these draft letters on May 13, 1955, but that the letter to the Bombay Government was signed only on September 19, 1955. Mr. Bhaba stressed the argument that the alleged declaration of the deceased made to Mr. Thacker early in May, 1955, was admissible in evidence in the matter of construction of the letter of the deceased dated May 3, 1955. To put it differently, the argument of the respondent was that the alleged declaration of the deceased to Mr. Thacker was made soon after the letter of May 3, 1955, and constituted part of the same transaction and was, therefore, admissible in evidence. In support of this argument learned counsel referred....