Law:

Section:

Section 10 of the Estate Duty Act, 1953 - Gift whenever made where donor not entirely excluded - Deceased gifted cash money to his wife from out of which house property was constructed - Deceased continued to live in house till his death - Assistant Controller included said property in estate of deceased - Whether on facts deceased could not be said to have remained in bona fide possession of property gifted by him and, therefore, section 10 would be inapplicable - Held, yes FACTS The deceased gifted the money to his wife. From this gifted amount the house property in dispute was built and registered in the name of the wife. The husband continued to live in it till his death. The Assistant Controller of Estate Duty included the property in the estate of the deceased. On appeal, the Appellate Controller held that the deceased had no disposable interest in the property and hence it could not be included in his estate. The Tribunal affirmed the findings of the Appellate Controller. On reference : HELD It is well settled that the property which stands benami in the name of another is one in respect of which the beneficial owner has no competency to dispose of. Before he can dispose of such a property he has to acquire a declaration from the appropriate court of law releasing the property in his favour. The question, however, is whether the main part of section 10 is applicable to a property which was in the possession and enjoyment of the deceased, but the same was not the subject matter of the gift from the deceased to the other person. Here the deceased had made the gift of the cash money from out of which the house property in dispute was built. It was evident that when the house was built out of the cash money gifted by the deceased, the deceased could not be held to remain in possession of the gifted property. The cash money gifted had been utilised in the construction of another property, namely, the house in dispute. Hence, the donor could not be said to have remained in bona fide possession of the property gifted by him. In this view of the matter section 10 would be inapplicable. Section 10 applies when the donor is in bona fide possession and enjoyment of…

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