TMI Blog1984 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e death of his father, Kishansingh, in the proceedings for assessment of estate duty taken by the Assistant Controller of Estate Duty, Jaipur. The accountable person claimed a deduction of Rs. 30,875 from the value of the estate of the deceased as a debt due from Kishansingh to his wife, Smt. Ajay Kanwar. The plea taken by the accountable person was that the aforesaid amount was credited in favour of Smt. Ajay Kanwar in the books of account of the deceased right from the assessment year 1950-51 up to the date of Kishansingh's death. The Assistant Controller of Estate Duty, in his assessment order dated July 30, 1968, disallowed the aforesaid claim on the ground that in the income-tax assessments of the deceased, Kishansingh, for all the years subsequent to the year 1950-51, interest on the said amount of Rs. 30,875 was taxed in the hands of the deceased, Kishansingh, and that it was not established that the wife of Kishansingh had any independent source for the said amount other than her husband. It was also observed by the Assistant Controller of Estate Duty that the accountable person did not produce any evidence to substantiate the claim regarding the deduction of Rs. 30,875 fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Tribunal and submitted an application before the Tribunal requesting it to refer a question of law arising out of its order dated November 6, 1971, to this court. However, the Tribunal, by its order dated April 27, 1972, declined to make a reference to this court. Thereupon, the Controller of Estate Duty approached this court by means of an application under section 64(3) of the Act. The court allowed the said application by its order dated February 5, 1973, and directed the Tribunal to draw up a statement of the case and refer the aforesaid question of law arising out of the order of the Tribunal dated November 6, 1971, to this court for its opinion. Consequently, the Tribunal drew up the statement of the case and referred the aforesaid question to this court by its order dated December 22, 1975. It was argued by the learned counsel appearing for the Department before us that the order of the Tribunal dated November 6, 1971, clearly shows that the Tribunal did not accept the contention advanced before it on behalf of the accountable person that the amount of Rs. 30,875 initially in fact belonged to the wife of the deceased. It was urged that the Tribunal erred in making ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kishansingh. There were two impediments in the way of the Tribunal in giving a finding of fact to the effect that the said amount belonged to the wife of the deceased, Kishansingh. The first reason was that in the income-tax assessments of Kishansingh, right from the beginning of the year 1950-51, the interest on the said deposit standing in the name of the wife of Kishansingh was disallowed by the Income-tax Officer and was added to the total income of the deceased, Kishansingh. This situation continued from 1950-51 right up to the death of Kishansingh. Moreover, those assessments were accepted without any objection as no appeals were preferred by Kishansingh in respect of the assessments on that question. The second formidable objection in this respect was that the Assistant Controller of Estate Duty and the Zonal Controller of Estate Duty held that no material was placed before them to show that the amount in dispute in fact belonged to the wife of Kishansingh, deceased. If no material was placed on the record to show that the amount did not belong to Kishansingh or that it belonged to his wife, it could not be held as a fact that the said amount belonged to the wife of Kishans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position or under any collateral disposition." The fact that the amount of Rs. 30,875 was shown in the account books of the deceased as due from Kishansingh to his wife since the year 1950-51 and only the payment of interest in respect of that amount was entered in the account books of the deceased, Kishansingh, is not disputed. Moreover, even the alleged payment of interest was disallowed at the time of assessment of income-tax and the said amount of interest was added to the total income of the deceased, Kishansingh, in the year 1950-51 and the same position continued to remain till the death of Kishansingh. Thus, even if the alleged gift of the said amount of Rs. 30,875 may be considered to have been made by Kishansingh to his wife, it is not the case of the accountable person that bona fide possession and enjoyment of the amount so gifted was immediately assumed by the donee. Moreover, for the non-application of section 10 of the Act, such gifted amount should have been retained by the donee to the entire exclusion of the donor or of any benefit to him. It is well settled that the crux of section 10 of the Act lies in two parts (i) the donee must have bona fide assumed posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very of possession. It was pointed out that the entries in the account books no doubt manifested the intention of the donor to make a gift, but the mere fact of making the entries in the books did not complete the gift. Another case on this point is that of CIT v. Smt. Shyamo Bibi [1966] 59 ITR I (All). In that case, the Allahabad High Court reviewed the case law on the subject and held that executing a memorandum and making entries in her own account books were the only acts done by the donor and those two acts did not have the effect of putting the money in the possession of the donee, as the account books were in possession of the donor and simply by making entries in the account books, the donor did not vest the donee with possession, dominion and control over the money. It was thus held that making mere transfer entries in the personal account of the donee did not amount to constructive delivery. The same view was taken by a Bench of this court in Nath Mat v. CED [1969] ILR 19 Raj 301. In that case, the deceased made entries in his account books on the Diwali of Samvat year 2003 withdrawing Rs. 1,00,000 from the capital account and crediting the same to the account of his da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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