N.K. SANGHI, PARTNER OF M/S SANGHI BROTHERS vs CONTROLLER OF ESTATE DUTY, RAJASTHAN

The Supreme Court held that the amount of Rs. 1 lakh gifted by Motilal Sanghi to his four sons and subsequently invested in a partnership firm could not be included in his estate under Section 10 of the Estate Duty Act, 1953. The Court established that the interest retained by the deceased in the partnership was unrelated to the gifts made, and the sons had assumed bona fide possession of the gifted amounts, retaining them to the entire exclusion of the donor. Consequently, the appeal was allowed, and the inclusion of the amount in the estate was denied.