Law:

Section:

Section 5 of the Estate Duty Act, 1953 - Property passing on death - Deceased was karta of HUF consisting of himself, his wife and two minor sons - Deceased transferred equal amounts to his minor sons standing to credit to his account in a company and certain amount to his married daughter - There was no material on record to show that there was a partial partition in HUF - Whether mere fact that amounts were given to two minor sons in equal shares did not furnish any indication of partial partition having taken place among members of HUF at instance of deceased - Held, yes - Whether, therefore, amounts so transferred were includible in dutiable estate of deceased - Held, yes FACTS The deceased was a karta of HUF consisting of himself, his two minor sons, and his wife. During the course of assessment proceeding in respect of the estate of the deceased, the Assistant controller noticed that the deceased had effected dispositions of Rs. 75,000 to each of his sons and Rs. 25,000 to his married daughter by debiting his personal account with a company and crediting the accounts of the respective recipients therein. As on the date when the dispositions were effected, there was no sufficient balance with the company, the Assistant Controller held that there were no valid gifts in favour of the sons nor in favour of the married daughter and the amounts sought to be given to the aforesaid persons thus fell under section 5 in absence of a complete gift. He, therefore, included those sums in the dutiable estate of the deceased. On appeal the Appellate Controller excluded those sums from the duty. Before the Tribunal it was urged that the dispositions of money made by the deceased amounted to a partial partition of the family assets so that these amounts passed out of the funds of the family and vested in the respective coparceners with effect from the respective dates and the fact that the amounts given to each of the two sons were equal on each of the dates supported the plea of partial partition; that these amounts did not constitute the joint assets of the coparcenary on the date when the deceased died and accordingly the sum should be excluded from the dutiable…

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