TMI Blog1983 (2) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... eased had received interest amounting to Rs. 55,177 on his deposits. Holding that the provisions of s. 17 applied to the facts of this case, the Asst. Controller included the slice of the assets of the controlled company computed under s. 17 in the value of the estate passing on death. A sum of Rs. 1,49,050 was thus included in the principal value of the estate as representing the deceased's slice of the assets of the controlled company. On appeal, the Appellate Controller held that the deceased had not received any benefit from the company within the meaning of r. 5 of the Controlled Companies Rules, that the current account did not represent any disposition of fund nor was there any transfer of property made by the deceased to the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e estate passing. Thus, the Tribunal upheld the Appellate Controller's order, though for different reason. Aggrieved by the decision of the Tribunal the Revenue has obtained a reference to this court on the following question of law. " Whether, on the facts and in the circumstances of the case, there was any transfer of assets to the controlled company by the deceased for the purpose of section 17 of the Estate Duty Act and whether any amount under section 17(1) is includible in the value of the estate passing on the death of the deceased ? In this case the factual position is not disputed. The deceased, during the relevant period, had deposited money in the current account as well as deposit account with a controlled company and was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected by a single operation or by associated operations. Under r. 4 a person is deemed, for the purpose of s. 17 of the Act, to have made a transfer of property to a company if the property came to be included in the resources of the company by the effect of a disposition made by him or with his consent or of any associated operations of which such a disposition formed one. The deposit of the amount by the deceased with the controlled company resulted in the amounts deposited becoming the resources of the company, and as such, as a change has been effected by an agreement or an arrangement between the deceased and the controlled company, it will amount to a disposition as defined in s. 2(6). Before the deposit, the amount was the excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will become capital employed for the purpose of the section. " We are in entire agreement with the said observations. Once the money has been deposited by the deceased with the company it becomes the asset of the company though the company is liable to repay the amount to the deceased. By depositing the amount with the company, the amount deposited belongs to the company and the deceased does not own the asset but only becomes an investor or creditor. It is not possible to say that the company with whom the money is deposited does not own the amount. In this view of the matter, we have to hold that there has been disposition by the deceased as contemplated by the definition in r. 2(6) in favour of the controlled company when he deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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