Law:

Section:

Section 5, read with section 10 of the Estate duty Act, 1953 - Property passing on death - Deceased who was partner in certain firm transferred certain amount in name of his sons and grandsons - Deceased's account in firm was debited and account of donees with firm was credited with same amount - Donees operated their accounts and interest was credited to their accounts - On subsequent date, deceased also transferred certain amount in favour of his grandsons and granddaughters which was to be paid to them at time of their marriage - However, no interest was credited to donees for said amount - Whether donee in each case assumed possession and enjoyment of property which was subject-matter of gift to entire exclusion of donor - Held, yes - Whether therefore, conditions for exemption from operation of section 10 were satisfied and impugned gifts did not pass on death of deceased - Held, yes FACTS The deceased who died on 22-3-1961 was a partner in certain firm, doing money-lending business. The other partners in the firm were his two sons, and an outsider. On 13-11-1947 the deceased transferred Rs. 1 lakh in favour of 'N' his grandson and another amount of Rs. one lakh on the same date in favour of 'D' and his sons jointly by debit and credit entries amounted to gift. The deceased's account in firm was debited and account of donees with firm was credited with same amount. On 18-11-1956, the account of the deceased in the books of the firm was debited with Rs. two lakhs and credits of specified amounts were given to the accounts of sons and their daughters. The narration in the journal of the firm stated that the amounts were debited to the capital account of the deceased at his instance and the corresponding amounts were credited in the names of the persons mentioned for the respective marriage expenses. No interest had been charged to these accounts. The deceased also addressed a letter to the firm, making it clear that the amounts in question were to be paid to the parties at the time of their respective marriages. The Asst. Controller included an amount of Rs. 3,45,000 in the estate of the deceased purporting to act under section 10. The accountable person…

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