Law: Estate Duty Act, 1953

Section: 64(1)

- Section 10 - Estate Duty Act, 1953 CASES REFERRED TO H.R. Munro v. Commissioner of Stamp Duties [1934] AC 61 (PC) ; 2 EDC 462, Clifford John Chick v. Commissioner of Stamp Duties of New South Wales [1959] 37 ITR (ED) 89 ; 3 EDC 915 (PC), Commissioner of Stamp Duties, New South Wales v. Owens [1953] 88 CLR 67 and St. Aubyn v. Attorney-General [1951] 2 All. ER 473 ; [1952] AC 15 ; 3 EDC 292. JUDGMENT Mehrotra, CJ. - The following question of law has been referred to this court by the Income-tax Appellate Tribunal, Calcutta Bench A, Calcutta, under section 64(1) of the Estate Duty Act, 1953 (hereinafter called "the Act") for opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the donor was entirely excluded from the possession and enjoyment of the subject-matter of gift, i.e., the half share of the partnership business known as Upper Assam Pharmacy and accordingly the provisions of section 10 of the Estate Duty Act were not attracted to the property so gifted ?" 2. The case has been stated to this court on an application made by the Controller of Estate Duty, Assam, Tripura and Manipur. 3. The relevant facts are that the deceased Shri Jnanendra Mohan Sen was the sole proprietor of a pharmacy business at Dibrugarh known as Upper Assam Pharmacy. On the 21st January, 1957, he made an absolute gift to his eldest son; Shri Birendra Kumar Sen, of "proprietary interest in the said business in the shape of a half partner, i.e., eight annas in the rupee." On the same date he entered into a partnership agreement with the donee in respect of the said business, under a registered deed of partnership dated January 21, 1957, sharing profits and loss in the said business equally. The entire business was valued at Rs. 60,000 and each of the partners was credited with Rs. 30,000 in the partnership books. On the 15th August, 1960, Shri Jnanendra Mohan Sen died, i.e., more than two years after the date of the gift. The question arose about the estate duty assessable on the chargeable estate of the deceased, Shri Jnanendra Mohan Sen. The Assistant Controller of Estate Duty held that section 10 of the Estate Duty Act…

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