CONTROLLER OF ESTATE DUTY Vs. V S SURYANARAYANAN

JUDGEMENT

(1.) One V. S. Suryanarayanan died on August 28, 1962. He was a partner in a concern of book sellers and publishers. His son, Suri, as the accountable person, submitted the return under the Estate Duty Act (hereinafter called "the Act"), Originally, the business of book sellers and publishers was carried on by the deceased as a sole proprietary concern. On October 1, 1957, he had converted this into a partnership concern with his son, the accountable person, the widow and son of a predeceased brother of the deceased with another minor son of the deceased admitted to the benefits of the partnership.

(2.) As seen from the order of the Tribunal, which is extracted in the stated case, the deceased credited his two sons and the widow and son of his pre-deceased brother on October I, 1957, with Rs. 10,950 each and debited his account for the total. This amount was treated as the capital contribution of the donees in the partnership. A deed of partnership itself was entered into on October 25, 1957. On that day, the deceased also executed a settlement deed by which he settled on his minor son, who was admitted to the benefits of the partnership, among others, the house and ground in which the partnership business was being carried on.

(3.) The Assistant Controller of Estate Duty considered that the gift of Rs. 10,950 to each of his two sons and the widow and son of a pre-deceased brother, which totalled Rs. 43,800, was within the clutches of Section 10 of the Act and that, therefore, it is liable to be included in the estate of his own on death. He was also of opinion that a sum of Rs. 65,000, which is the value of the house settled on the minor son, was also liable to be included in the estate of the deceased for the purpose of Section 10 of the Act. This was in the view that though there were gifts of these amounts and the house to the respective donees they did not retain possession of the same to the exclusion of the donor subsequent to the gift. This order was confirmed by the Appellate Controller of Estate Duty.