CONTROLLER OF ESTATE DUTY Vs. P. MARIAPPA MUDALIAR

JUDGEMENT

(1.) In this reference u/s 64(1) of the ED Act, the following question has been referred to this court:

(2.) The ld. counsel for the Revenue contended that this is a clear case which attracted the provisions of s. 10 of the Act and he referred to the decisions on CED v. V.S. Suryanarayan (1976 CTR (Mad) 325 : (1978) 114 ITR 599 (Mad)), CED v. S. Kuppuswami (1979) 13 CTR (Mad) 319. The question is whether these decisions would be applicable to this case.

(3.) There is a later decision of the Supreme Court: CED v. Smt. Kamalavati Shri Jai Gopal Mehra (1979) 12 CTR (SC) 389 : (1979) 120 ITR 456 (SC). This decision dealt with two assessments of two different assessees. In C.A. 2527/72 the facts were as follows: One Maharaj Mal, the deceased, was a partner in a firm with half share therein, the other two partners were Jialal and Hansraj having ¼th share each on 27-3-1957 Maharaj Mal made a gift a Rs. 1,00,000/- to his son Lalit Kumar and Rs. 50,000/- to his wife Kamalavati. In the books of the partnership firm the sum of Rs. 1,50,000/- was debited in the account of Maharaj Mal and credited to the accounts of Lalit Kumar. Simultaneously, with effect from 28-3-1957 Lalit Kumar was taken as a partner in the firm M/s. Maharaj Mal Hans Raj by giving ¼ share out of the half share of Maharaj Mal. In other words, with effect from the said date instead of 3, there were four partners with equal shares in the partnership firm. Maharaj Mal died on 9-1-1962 and on his death the firm was reconstituted. Though the ED authorities, relying on the judgment of the Privy Council in Clifford John Chicks v. Commr. of Stamp Duty (37 ITR 89 ED) and also the judgment of the Calcutta High Court in Rash Mohan Chatterjee v. CED, (1964) 52 ITR (ED) 1 held that the sum of Rs. 1,50,000/- was includible in the assessment of estate duty, the Tribunal took a different view and held that s. 10 was not attracted, and at the instance of the Controller made a reference to the High Court on the question whether the provisions of sec. 10 were attracted with reference to the gifts of Rs. 1,50,000/- made by the deceased, as mentioned above. The High Court confirmed the view of the Tribunal and the matter came up in appeal to the Supreme Court. The Supreme Court held, after referring to the decisions in George Da Costa v. CED (1967 (63) ITR 497 SC) and Ramachandra Gounder case (1973 CTR (SC 103 : 88 ITR 448 SC) the Mysore High Court's decision in CED v. Aswatha Narayana Setty (1969 (72) ITR 29 Mys.) and also the decision of the Gujarat High Court in Sakarlal Chunilal s. CED 1975 (98) ITR 610 Guj.) held that sec. 10 was not attracted to the case. During the course of the judgment their Lordships explained the decision in Ramachandra Gounder's case (1973 CTR (SC) 103 : 88 ITR 448 SC) as follows: