Law:

Section:

Section 9 of the Estate Duty Act, 1953 - Gifts within a certain period before death - Letter dated 3-5-1955 addressed by deceased to respondent referred to a promise previously made that deceased would pay entire unpaid balance from sale of palace, to respondent in such a way that income thereof would serve as allowance paid to respondent - However, it was only by subsequent letter dated 19-9-1955 deceased instructed State Government (purchaser of palace) to pay rupees nine lacs out of unpaid balance directly to respondent- - Deceased died on 17-5-1957 - Whether, on facts, transfer of gifted amount became effective only from 19-9-1955 - Held, yes - Whether 'therefore' gift fell within two years period referred to in section 9, and was liable to estate duty - Held, yes FACTS The deceased, father of the respondent was owner of a palace - The palace was sold to the State Government and the possession was handed over on part payment. By letter dated 3-5-1955 the deceased wrote to the respondent in reference to the promise previously made that the deceased would pay the entire unpaid balance from the sale of palace to the respondent in such a way that the income thereof would serve as an allowance paid to the respondent by the deceased. In a subsequent letter dated 19-9-1955 the deceased had instructed the State Government to pay Rupees nine lacs out of the unpaid balance directly to the respondent. The deceased died on 17-5-1957. The Deputy Controller charged the amount to the estate duty. On appeal, the Central Board of Revenue confirmed the order of the Deputy Controller. The High Court found that the provisions of section 130 of the Transfer of Property Act applied and the letter dated 3-5-1955 manifested clearly the intention of the deceased to make the gift to the respondent. The High Court, accordingly, held that the gift of Rs. nine lakhs could not be regarded as having been made within two years of death of the deceased and was not liable to estate duty. On appeal to the Supreme Court: HELD It is well-established that an instrument in writing under section 130 of the Transfer of Property Act is not required to be in any particular form. It is not necessary…

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