ABDUL ALIM Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS is a reference under Section 64(1) of the Estate Duty Act at the instance of the accountable person, Sri Abdul Alim. The Central Board of Direct Taxes has referred the following question for the opinion of this court:

(2.) THE estate duty assessment concerned the estate of late Shri Hajee Abdul Haq who died on 15th of October, 1957. THE accountable person filed a statement of account declaring the net principal value of the estate, passing or deemed to pass on the death of the deceased. While determining the total value of the estate left by the deceased, the Assistant Controller, Estate Duty, included a sum of Rs. 44,000 which the deceased had gifted to his minor sons on 15th of April, 1954. He held that the deceased held the money gifted to the minor sons as a trustee with effect from 15th of April, 1954, till the date of his death. Section 22 of the Estate Duty Act, therefore, became applicable and this amount also is deemed to pass on death of the deceased, and is liable to be included in the principal value of the estate left by the deceased.

(3.) A perusal of the appellate order of the Board shows that the case of the accountable person was that the deceased had gifted a sum of Rs. 44,000 to his minor sons in cash. The order further shows that this money was subsequently brought in as capital of the firm in which the deceased was a partner. The two minors were also admitted to the benefits of the firm. According to the statement of the case, the deceased made a gift of Rs. 44,000 to his minor sons on 15th of April, 1954, by debiting his capital account with the firm. This indicates that perhaps the gift was not made in cash. Be that as it may, there is no dispute about the fact that the gift was in fact made and that the amount gifted was reinvested in the firm as its capital. The deceased was a partner in this firm and the two donees were admitted to its benefits.