CONTROLLER OF ESTATE DUTY Vs. CHANDRAVADAN AMRATLAL BHATT

JUDGEMENT

(1.) IN this reference under S. 64(1) of the ED Act (hereinafter referred to as the Act), the following questions have been referred to us by the Tribunal:

(2.) THE facts giving rise to this reference are as follows :

(3.) ON these facts, the Assistant Controller held that the alleged gifts of Rs. 30,000 in the first instance and of Rs. 24,000 subsequently made by the deceased to his sons were invalid and in the alternative he held that, in any event, bona fide possession and enjoyment of the amounts has not been immediately assumed by the donees. Since these amounts were retained in the firm, wherein the deceased was a partner, the provisions of S. 10 of the Act would apply. In the result, he brought to charge the sum of Rs. 58,166, i.e., principal amount of Rs. 54,000 and interest on that amount. The accountable person thereafter preferred an appeal to the Appellate Controller and he held that the sum of Rs. 30,000 could not be said to have been gifted by the deceased and hence the sum of Rs. 30,000 together with interest referable to the same was includible in the principle value of the estate of the deceased. As regards the amount of Rs. 24,000, the Appellate Controller held that, though the gifts were genuine, the principle laid down by the Privy Council in Clifford John Chick vs. CIT of Stamp Duties (1959) 37 ITR (ED) 89 applied and hence he included the sum of Rs. 54,000 in the principal value of the estate of the deceased. He held that the interest referable to the sum of Rs. 24,000 should be ignored inasmuch as S. 10 of the Act would not be applicable to the subsequent accretion to the amounts gifted. Thereafter, there was an appeal to the Tribunal and the Tribunal held that the gifts of Rs. 30,000 and Rs. 24,000 were valid gifts. The Tribunal also held that S. 10 of the Act would not be applicable and the provisions of S. 10 were not attracted in this case. In the alternative, the Tribunal held that the interest referable to the sum of Rs. 30,000 could not be included in any event in the principal value of the estate passing on the death of the deceased and it also held that, according to the Department's own case, the interest in respect of the sum of Rs. 24,000 was not to be included in the principal value of the estate. Thereafter, at the instance of the Controller, the Tribunal has referred the abovementioned four questions to us.