Law:

Section:

Section 10 of the Estate Duty Act, 1953 - Gift whenever made where donor not entirely excluded - Deceased and two others including his brother 'S' were parents of a firm - Certain amount was credited to accounts of 'S' after debiting deceased in accounts of firm - Later by a gift deed deceased gifted that amount to 'S' and that amount was remained with firm till death of deceased - Whether effect of showing amount to credit of donee in books of account of partnership firm was to show that donee was a creditor of partnership firm and firm was indebted to that amount - Held, yes - Whether, however, as one of partners of firm deceased was in possession and enjoyment of property gifted by it to 'S' till date of his death - Held, yes - Whether, therefore, amount of gift was includible in principal value of estate of deceased in accordance with provisions of section 10 - Held, yes. FACTS The deceased and two other persons related to him were partners of a firm. In the books of account of the partnership firm, a sum of Rs. 60,000 was debited to the account of the deceased and credited to the account of S, brother of the deceased. At the time of this transfer no cash was paid to S but from 18-10-1952, till the date of the death of the deceased the amount stood credited in the books of the firm in the account of S. On 29-8-1953, the deceased made a declaration of gift in respect of that amount. Subsequently, i.e., in a book belonging to 'S' the deceased acknowledged on behalf of the firm that the said sum was kept by S with the partnership on "Anamat" account and without interest. On the death of the deceased, his widow applicant, filed a statement of account in the prescribed form, showing the principal value of the estate passing on the death of the deceased. The Assistant Controller determined the principal value of the estate by adding said sum of Rs. 60,000. It was contended before the Assistant Controller that the deceased had gifted that sum to S more than two years prior to the date of his death and that, therefore, the amount could not be included in the principal value of the estate of the deceased. The Assistant Controller held that the conditions laid down…

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