Law:

Section:

JUDGMENT Veeraswami, J.-In the first of these references arising out of the Tribunal's order, the question substantially is whether the property in Avinasi Road, Coimbatore, as well as a sum of Rs. 1 lakh passed at the death of one C.S. Ramiah Gounder on May 5, 1957, and, as such, are dutiable under the provisions of the Estate Duty Act, 1953. He was a partner of a firm, called N. Desai Gounder & Co. at Coimbatore, and the property was in the occupation of the firm as a tenant. In August, 1953. by a registered document, he settled the property absolutely and irrevocably on his two sons, C.R. Lingiah and C.R. Krishnan. Even thereafter the firm continued to be in the occupation of the premises, but the rents accruing were thenceforward credited in equal shares to the relative accounts of the donees in its books. The partnership came to an end on April 30, 1957. On March 30, 1953, long before its dissolution, the firm was asked by Ramiah Gounder to transfer from his loan account with it a sum of Rs. 1 lakh to the credit of each of his 5 sons in equal shares of Rs. 20,000 by opening separate accounts in their individual names in the firm's books. The Tribunal, differing from the revenue, held that the immovable property as well as the sum of Rs. 1 lakh did not pass on the death of Ramiah Gounder. The Tribunal was of opinion that there was no ground for holding that the gift had not been made without the donor retaining any interest in the immovable property, and that it was the firm that had the benefit of the sum of Rs. 1 lakh given to the sons, and the mere fact that the father was a partner of the firm would not mean that he had the benefit of the money. The two questions which arise under the reference are : "1.Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the house property in Avinasi Road, Coimbatore, is not liable to estate duty as property deemed to pass on the death of the deceased under section 10 of the Estate Duty Act, 1953 ? 2.Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 1 lakh gifted to his sons in 1953 is not liable to…

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