The question of whether a particular transaction amounts to a gift or a partition is essentially one which should be answered by reference to the intention of the grantor.

JUDGMENT :

T.U. Mehta, J.

The point involved in this reference is whether the disbursement of the amount of Rs. 90,005 made by the deceased amongst his five sons amounts to gift so as to attract the provisions of section 10 of the Estate Duty Act, 1953, which is hereinafter referred to as "the Act ".

2. Short facts of the case are that in the Samvat year 2009 which is equivalent to the year 1952-53, the deceased, Bhailal Harjivandas Dave, was running a proprietary business known as " M/s. Bhailal Harjivan ". At that time the deceased had five sons and one daughter. On 6th January, 1953, he made the disbursement of the amount of Rs. 90,005 equally between his five sons, each getting an amount of Rs. 18,001. At the same time, he set apart a further amount of Rs. 3,673 for the marriage expenses of his daughter, Jayagauri, crediting the same amount to her personal name. A further amount of Rs. 6,001 was set apart by him on his own personal name. He further put the havala entry for the amount of Rs. 29,020 which was due from him to a partnership concern named " Dhrangadhra Ginning & Pressing Factory " in which he himself was a partner. In the account books of M/s. Bhailal Harjivan which was at that time his proprietary concern, the deceased maintained his own personal account. In this personal account he posted the entries evidencing the above disbursement totalling to Rs. 1,28,699. At annexure " C " we find the above referred entries evidencing this disbursement. By reference to these entries it becomes apparent that they were made on Aso Vad 30th which was the last day of Samvat year 2009.

3. In the beginning of the next Samvat year 2010 the business in the name of M/s. Bhailal Harjivan ceased to be a proprietary business because the same was converted by the deceased into a partnership with two of his major sons. It is an admitted position that, thereafter, in Samvat year 2018, one of the remaining sons became major and, therefore, he was also taken as a partner in this newly formed partnership firm. Ultimately, in Samvat year 2022 the deceased, Bhailal, retired from this partnership and about three months thereafter, i.e., on January 9, 1966, he died. The respondent, Kantilal, who is one of the sons of the deceased, is the accountable person for the purpose of estate duty. During the course of the assessment the Assistant Controller of Estate Duty found that the disbursement of the amount of Rs. 90,005 made by the deceased as between his five sons by the end of Samvat year 2009 amounted to gift and, therefore, the provisions contained in section 10 of the Estate Duty Act were attracted. The contention raised by the accountable person was that this disbursement did not amount to gift but amounted to a partition during the course of which the deceased had thrown his self-acquired property amounting to Rs. 90,005 in the common stock of the family. According to the accountable person, therefore, the transaction did not amount to gift and hence there was no scope for attracting the provisions of section 10 of the Act. The Assistant Controller of Estate Duty rejected this contention of the accountable person with the result that the matter went in appeal before the Appellate Controller of Estate Duty who confirmed the view taken by the Assistant Controller. Ultimately, the matter went to the Appellate Tribunal. The Appellate Tribunal relied upon the decision given by the High Court of Bombay in Kisansing Mohansing Balwar v. Vishnu Balkrishna Jogalekar, AIR 1951 Bom. 4 and held that the disbursement in question amounted to partition and, therefore, it did not amount to a gift contemplated by section 10 of the Estate Duty Act. The Tribunal, therefore, concluded that so far as this amount of Rs. 90,005 is concerned, it did not form a part of the principal value of the assets held by the deceased. Being aggrieved by this decision of the Tribunal, the department has preferred this reference in which the following question is referred to us by