Law:

Section:

Section 9(1) of the estate duty act, 1953-Gifts-Made within certain period before death-Within one year prior to his death, deceased sold certain shares to sons and daughters of one nrs at price lower than fair market value-Simultaneously, nrs sold identical number of shares of same company at same lower price to certain relatives of deceased-Whether amount representing difference between price charged and fair market value of shares amounted to gift under section 9(1)-Held, on facts, no Section 27(1) of the estate duty act, 1953-disposition in favour of relatives-whether transaction, summarised under the caption 'gifts made within certain period before death', because of cross transfer involved, amounted to disposition of property in favour of relatives and attracted charge of tax under section 27(1) read with section 9(1)-Held, on facts, no Section 2(15) of the estate duty act, 1953-Property-Deemed disposition of-Whether in transaction, summarised under the caption 'gifts made within certain period before death', there was extinguishment of debt or right of deceased as contemplated in explanation 2 to section 2(15), making it a case of deemed disposition of property-Held, on facts, no Facts One BMS died on 24-1-1960. On 17-8-1959, i.e., within one year prior to his death, he sold certain shares of a company of the face of Rs. 100 at the rate of Rs. 125 per share to the sons and daughters of one NRS who was a co-partner with BMS in a firm. On the same date, NRS also sold an identical number of shares of the same company at the same rate to the wife, daughters and daughter-in-law of the deceased. The Assistant Controller determined the fair market value of the aforesaid shares at Rs. 230 per share and held that there was a gift of property by the deceased to the transferees to the extent of difference between the fair market value of the shares and the actual consideration received by the deceased, and that since the transaction took place within one year prior to the death of the deceased, the impugned property would pass under section 9(1). On appeal, the Appellate Controller held that the aforesaid amount of difference was liable to be taxed as a gift under…

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