Bombay H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sums of Rs. 50,000 and Rs. 1,25,000 or any portion thereof, gifted by the deceased to his wife, Smt. Rampyaribai, and his minor son, Kisanlal, were includible in the estate of the deceased as property deemed to pass on his death under s. 10 of the ED Act, 1953 ?

Counsel Appeared

K. B. Bhujale with V. H. Patil & K. Shivram, for the Accoutable Person : D. R. Dhamuka with S. V. Naik, for the Revenue

SUGLA, J.:

This reference involves two questions of law. They are: “(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sums of Rs. 50,000 and Rs. 1,25,000 or any portion thereof, gifted by the deceased to his wife, Smt. Rampyaribai, and his minor son, Kisanlal, were includible in the estate of the deceased as property deemed to pass on his death under s. 10 of the ED Act, 1953 ? (2) Whether the Tribunal was right in law in holding that the deceased’s share in the goodwill of the firm, M/s Bastiram N. Maheshri, passing on his death and includible in the estate is 1/2 and not 1/8th of the said goodwill ?”

The questions are referred at the instance of the accountable person. The first question involves two gifts of Rs. 50,000 and 1,25,000 by the deceased to his wife, Smt. Rampyaribai, and minor son, Kisanlal, made in the year 1954. The deceased was a partner with eight annas share in the firm of M/s Bastiram Narayandas Maheshri Sinnar. The amounts were debited to his account and the accounts of his wife, Rampyaribai, and the minor son, Kisanlal, were credited. The minor son was admitted to the benefits of the partnership on 5th Oct., 1956, with three annas share in the profits. Smt. Rampyaribai continued as a creditor in the firm. Kisanlal, the minor son, attained majority on 20th Dec., 1960. The deceased died on 19th Dec., 1963.

The gift of Rs. 1,25,000 made by the deceased to his then minor son, it is agreed, is covered by the Supreme Court decision in the case of CED vs. R. V. Viswanathan (1976) 105 ITR 653 (SC) and the answer has got to be in the negative and in favour of the accountable person. As regards the amount of Rs. 50,000 gifted to Smt. Rampyaribai also, the issue is covered by another Supreme Court decision in the case of CED vs. Kamlavati and CED vs. Jai Gopal Mehra (1979) 120 ITR 456 (SC) and the answer has got to be in the negative and in favour of the accountable persons.

The second question, it is further agreed, is also covered by this Court’s decision in the case of CED vs. Ratanlal Budhamal Taki (1983) 142 ITR 151 (Bom) and the answer to this question has got to be in the negative and in favour of the accountable person.

In the result, both the questions are answered in the negative and in favour of the accountable person.

No order as to costs.

[Citation : 170 ITR 644]