JUDGMENT

V. D. TULZAPURKAR, J. :— The question raised for our determination in this appeal is whether on the facts and in the circumstances of the case the amount of Rs. 3 lakhs transferred by the deceased to his three grand-nephews in equal shares was includible in the estate of the deceased that passed on his death? Substantially the answer thereto depends upon whether S. 10 of the Estate Duty Act, 1953 is attracted to the case or not.

2. The facts giving rise to the question may briefly be stated. The deceased, Sri Bankatlal Lahoti was a partner in the firm of M/s Dayaram Surajmal, which carried on business as Bankers. With a view to give Rs. 1 lakh each to his three minor grand-nephews (three grand-sons of his deceased brother) the deceased on 4th Oct. 1952 issued a cheque for Rs. 3 lakhs in favour of the firm; this amount was debited in the account of the deceased in the firm and credited in the accounts of the three minors in equal proportion. The said sum thus transferred to the three nephews continued to stand in their respective accounts in the books of the firm till its dissolution on 4th July 1960, whereafter some assets were allotted to each one of them in lieu of the amounts standing to their credit. The deceased died on 21st Feb. 1956.

3. After the death of the deceased, his widow Smt. Godavari Bai as the accountable person filed an account of the assessees estate declaring the value thereof at Rs. 2,60,702. This did not include the sum of Rs. 3 lakhs transferred by the deceased to the three grandnephews on 4th Oct. 1952. The assessee contended that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with S. 130 of the Transfer of Property Act by effecting entries in the books of account. Alternatively it was contended that the transfer amounted to a novation which did not require an instrument signed by the transferor. The Deputy Controller negatived both the contentions; the first on the ground that there was no valid transfer of actionable claims because it was not effected by an instrument in writing signed by the transferor as required by S. 130 of the Transfer of Property Act while the alternative contention on the ground that the transaction did not amount to a novation inasmuch as there was no substitution of one debt for another. In this view of the matter the Deputy Controller held that the sum of Rs. 3 lakhs was includible in the estate of the deceased that passed oil his death. In the appeal preferred by the assessee the selfsame contentions were urged on her behalf before the Appellate Controller of Estate Duty while the Deputy Controller justified the assessment on the additional ground that the sum of Rs. 3 lakhs was also includible in the Estate of the deceased that passed oil his death under S. 10 of the Estate Duty Act, 1953. The Appellate Controller rejected the assessees contentions and accepted those of the Deputy Controller and confirmed the inclusion of the amount in the estate of the deceased. In the further appeal preferred to the Appellate Tribunal since it was admitted on behalf of the assessee that apart from the cheque issued by the deceased in favour of M/s Dayaram Surajmal and the entries made in the books of that firm debiting the deceaseds account and crediting the accounts of the donees there was no other document to evidence the transfer the Tribunal presumed that the transfer was effected as a result of oral instructions which must have been given by the deceased to the firm. Counsel for the assessee, however, urged that notwithstanding the absence of an instrument in writing signed by the assessee the transfer was valid under S. 130 of the Transfer of Property Act and in that behalf reliance was placed or, Ramaswamy Chettiar v. Manickam Chettiar, AIR 1938 Mad 236 and Seetharama Ayyar v. Narayanaswami Pillai, 47 Ind Cas 749, but the Tribunal did not accept the contention and held that the plain reading of S. 130 showed that the transfer