CONTROLLER OF ESTATE DUTY Vs. SHRI BIRENDRA KUMAR SEN

JUDGEMENT

(1.) THE following question of law has been referred to this Court by the Income Tax Appellate Tribunal. Calcutta Bench A. Calcutta Under Section 64(1) of the Estate Duty Act, 1953 (hereinafter called 'the Act') for opinion:

(2.) THE relevant facts are that the deceased, "Shri Jaanendra Mohan Sen was the sole proprietor of a pharmacy business at Dibrugarh known as upper Assam Pharmacy. On the 21st January 1957 he made an absolute gift to his eldest son, Shri Birendra Kumar Sen of.

(3.) AS the present gift admittedly has been made more than two years before the death of Shri Jaanendra Mohan Sen. Section 9 of the Act will not be attracted. The only question referred to us is whether in the circumstances of the case Section 10 is attracted. Section 10 in effect lays down that the gifts which have not been perfected will not be regarded as divesting the donor of his tight in the property for the purposes of assessing the estate duty. It only lays down that even though the donor has purported to part with the ownership of the property, it will be deemed to pass on the donor's death to the donee for the purposes of the payment of the estate duty. Before however, this section can be excluded, three things are essential, firstly that the donee has resumed immediate possession and enjoyment of the gifted property, secondly that having assumed such possession the donee has retained possession and enjoyment to the entire exclusion of the donor and thirdly that the donee has retained possession and enjoyment of the property to the exclusion of any benefit conferred on the donor under the gift In the present case it is not contended by the Department that the donee did not assume bona fide possession or enjoyment of the gifted property immediately after the gift. It is further urged by the Department that no benefit was conferred under the gift on the donor and thus the question of excluding the donor from benefit does not arise in the present case. The only contention of the Department is that from the circumstances of the present case and the materials on the record it is evidently clear that the donee has not retained bona fide possession and enjoyment of the gifted property to the entire exclusion of the donor. The question which the court has to ash -in considering the applicability of section of is whether it can be said in the circumstances of the present case that the donee, namely Shri Birendra Kumar Sen retained to the entire exclusion of his father Janendra Mohan Sen the half share which he got under the gift in the business, when on the same date the gift was executed, he entered into, a partnership with his father to carry on a similar business and as a capital for the new business, he subscribed his half share in the old business which was gifted to him.