Law:

Section:

Section 10 of the Estate Duty Act, 1953 - Property deemed to pass - Gifts whenever made where donor not entirely excluded - A partition deed was executed among deceased and his two sons - Bulk of properties including mill property was allotted to deceased - In order to equalize shares, it was provided that deceased would pay certain sums to his sons - This partition deed was followed by a partnership deed wherein said two sons of deceased were given 1/3rd interest in mill property - Following death of deceased question arose as to whether it was only 1/3rd interest in mill property or it was entire interest in such property that passed in hands of accountable persons - Tribunal held that it was only 1/3rd interest in mill property that passed in hands of accountable persons - Whether deceased when he impressed his separate property with character of joint family property did not transfer those property in favour of any person and that being so, there could not be any question if there being a gift - Held, yes - Whether therefore, value of mill properties mentioned in partition deed was not dutiable under section 10 - Held, yes FACTS A partition deed was executed among the deceased and his two sons. It was stated at the beginning of this document that the parties to the document were an undivided Hindu family and that they did not possess any coparcenory properties at the time of the execution of the partition deed. The properties dealt with under the partition deed, were acquired with the joint labour and efforts of the father and his two sons. As a result of the partition deed, though the intention appeared to have been to divide all the properties including the immovable properties equally among the three members of the family, the bulk of the properties including the property in question were actually allotted to the deceased. In order to equalise the shares, it was provided that deceased should pay to his sons certain sums. This partition deed was followed by a partnership deed. The essential feature of this partnership deed was that the said two sons were given one-third interest in the property in question and by conferring such right which was to be…

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