RAWAL P M Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS is a reference under S. 64(1) of the ED Act, 1953, made at the instance of the accountable person. Two questions have been submitted to us for our opinion in this reference. These questions are as follows :

(2.) THE deceased, Mahipatram G. Rawal, was at the time of his death on 11th Feb., 1962, a partner in two firms, namely, Rawal and Co., Bombay, and Rawal and Co., Madras. He was also a member of a joint and HUF which was assessed to income tax as a separate unit under the name of "M. G. Rawal, HUF". Between 26th Oct., 1943, and 11th Nov., 1946, the deceased made gifts of several sums of money aggregating to Rs. 13,000 to his near relatives. These gifts were made by debiting the deceased's personal account with the said firm of M/s Rawal and Co., Bombay, and opening separate accounts in the names of the donees and crediting the respective amounts given to each of the donees in the account opened in his or her name. During the above period, the deceased also made other gifts to his near relations aggregating to Rs. 31,000. These gifts were made by debiting the deceased's personal account in the books of account of the said HUF and crediting the accounts of the donees which were then opened in the said books of account with the respective amounts gifted to them. The Asstt. CED as also the Appellate CED and the Tribunal all held that these amounts were liable to be included in the estate of the deceased by reason of the provisions of S. 10 of the ED Act. So far as the said gift of Rs. 13,000 is concerned, the position is now finally settled as pointed out by us in our judgment in ED Ref. No. 1 of 1970, delivered on 12 and 13 Sept., 1979 Khatija bai Abdulla Soomar vs. CED (1980) 124 ITR 160 (Bom), by the decision of the Supreme Court, namely, CED vs. C. R. Ramachandra Gounder (1973) 88 ITR 448 (SC), and the judgment of the Supreme Court delivered on 5th August, 1979, in Civil Appeal No. 2527 of 1972 and Civil Appeal No. 2528 of 1972 [CED vs. Kamlavati and CED vs. Jai Gopal Mehra (1979) 12 CTR (SC) 389 : (1979) 120 ITR 456 (SC) ]. In view of these judgments, it must be held that S. 10, of the ED Act was not attracted to this gift of Rs. 13,000.

(3.) THE material conditions which must be satisfied before property, the subject matter of the disposition, can be excluded from the principal value of the estate of the deceased under S. 22 are the same as those required to be satisfied under S. 10 of the ED Act. Since these conditions are the same as those of S. 10, the ratio of the above Supreme Court cases would govern the present case and question No. 2, must also, therefore, be answered in favour of the accountable person. In the result, we answer the aforesaid questions as follows : Question No. 1: In the negative. Question No. 2: In the negative. The respondent will pay to the applicants the costs of this reference.