Law:

Section:

Section 10 of the estate duty act, 1953-Gifts where donor not entirely excluded- deceased gifted rs. 20,000 to his two daughters, certain agricultural lands to his sons, and a house property to his wife-Later on daughters deposited rs. 20,000 in deceased's proprietary business, sons invested agricultural income in firm in which deceased along with them was partner and wife let out house property to firm in which deceased was partner-whether value of all these gifts includible in, principal value of estate of deceased under section 10-held, on facts, no Facts K, who died on 10-3-1967, had gifted during his life time (a ) Rs. 20,000 to his two daughters, who after some time deposited the amount in the deceased's proprietary business which was later on converted into a partnership; (b) certain agricultural lands in the year 1959 to his two sons, who in the years 1965, 1966 and 1967 invested the income derived from the said land in a firm in which the deceased way partner along with them; and (c) a house to his wife, who later on let out the same to the same firm in which the deceased was a partner. On K's death, the Assistant Controller included the value of all these gifts in the principal value of the estate of the deceased under section 10 on the ground that the donor was not entirely excluded from the possession and enjoyment of the gifted properties. On appeal, both the Appellate Controller and the Tribunal upheld the said inclusion. On reference, the accountable person contended that possession, if any, by the donor subsequent to the donees coming into possession of the property was not referable to the original gift made and that, therefore, section 10 would not be attracted. Held It is now settled by the Supreme Court decision in the case of CED v. Kamlavati [1979] 120 ITR 546 that mere fact of the donor sharing the enjoyment or the benefit in the property is not sufficient for the applicability of section 10, unless such enjoyment or benefit is clearly referable to the gift, and that if the possession, enjoyment or benefit of the donor in the property is consistent with the other facts and circumstances of the case other than those of the factum of gift,…

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