1979 (9) TMI 32 - HC - Income Tax

Summary

Issues:
Interpretation of provisions of Estate Duty Act, 1953 regarding inclusion of gifted sums in deceased's estate; Application of sections 10 and 22 of the Act; Exclusion of property held by deceased as trustee from estate value.

Analysis:
The judgment pertains to a reference under section 64(1) of the Estate Duty Act, 1953, involving questions on the inclusion of gifted sums in the deceased's estate. The deceased, a partner in two firms and a coparcener in a Hindu undivided family, made gifts totaling Rs. 13,000 and Rs. 31,000 to near relatives. The court considered whether these amounts should be included in the estate value under section 10 of the Act. It was argued that the gifts made to the Hindu undivided family should be treated differently, but the court held that the principles laid down by the Supreme Court in previous cases applied, and both amounts were not liable for estate duty.

Regarding the second question, the deceased had executed a trust deed for charitable purposes, investing Rs. 40,000 with a firm in which he was a partner. At the time of his death, Rs. 20,000 remained in the trust account. The revenue authorities contended that section 22 of the Act applied, making the remaining amount subject to estate duty. However, the court found that the conditions under section 22 were akin to those of section 10, and following the Supreme Court's precedents, ruled in favor of the accountable person, excluding the Rs. 20,000 from the estate value.

In conclusion, the court answered both questions in the negative, determining that the gifted sums and the trust fund amount were not includible in the deceased's estate. The accountable person was awarded costs for the reference. The judgment provides a detailed analysis of the application of relevant provisions of the Estate Duty Act and the interpretation of Supreme Court decisions in similar cases to reach the final decision.