1982 PLP (Trib (PTD)

MIAN ABDUL KHALIQ (MEMBER).‑‑This appeal filed at the instance of the accountable persons of late Mian M. H. M. is directed against the order of the D. C. E. D. Lahore, dated 26‑6‑19'

79. The deceased had expired on 16‑9‑1977. The controvertial issues are as under:‑ Cash‑in‑hand.‑The accountable persons declared cash‑in‑hand at Rs. 3,

250. It was proposed at Rs. 1,50,000, but was finally adopted at Rs. 50,

000. For the adopted estimate, the Assessing Officer relied on declara tion filed by the deceased under section 3‑C on 31‑8‑1976; contents of the wealth‑statement for the year ending 31‑12‑1976 and social as well as financial status of the deceased. On behalf of the appellants, the adopted estimate of cash‑in‑hand was assailed as to be totally unjustified having been based merely on conjectures and surmises. We do not find any justification for the adopted cash‑in‑hand. The excess income declaration filed by the deceased under section 3‑C on 31‑8‑1976 comprised of gold and jewellery measuring 290 tolas valuing Rs.60,300; value of and at Rs. 5,000; cash at Rs. 35,400, and bank account at Rs. 15,

754. Cash‑in‑band declared at Rs. 35,400 in 3‑C declaration on 31‑8‑1976 was deposited by the deceased on the same date in his account existing with Messrs K. A. L. This fact stands duly established from copy of relevant account statement. The Income‑tax authorities having accepted that declaration, the Assessing Officer erroneously drew adverse inference opt that score. Wealth statement of the deceased as on 31‑12‑1976 indicated cash‑in‑band at Rs. 3,

250. A reconciliation of wealth as on the date of death with the earlier wealth statement as on 31‑12‑1976 fully supports the declared cash‑in‑hand. In the Income‑tax proceedings wealth‑statement of the deceased as on the date of death showing cash‑:n‑hand at Rs. 3,250, having ' :n accepted their does not seem to be any sense in making any addition to that accepted version. The inference drawn by the Assessing Officer regarding the deceased to be in the habit of retaining cash‑in‑hand just due to delayed depositing of sale, proceeds of gold ornament at Rs. 17,477, on 3‑5‑1977 against the actual sale conducted in November, 1976, is also erroneous. The deceased had sold gold ornaments on five different occasions. Entire sale‑proceeds were indicated in wealth‑statement as on 31‑12‑1976. Mere retention of cash for few months cannot lead to the inference that the deceased was habitual of doing so. Admittedly, the deceased did not have any personal business rather derived salary and share income only. The fact that at the time o death the deceased held money deposits in bank at Rs. 5,27,579, also lend support to our conclusion that the deceased was not in the habit of retaining cash‑in‑hand; rather was having regular transactions with the bank. Assump tion of cash‑in‑hand just on the basis of social and financial status of the deceased was erroneous. Financial status of the deceased was covered by heavy bank deposits and social status has noshing to do with cash‑in‑hand. The Tribunal has already held in E. D. A. No. 40 of 1978‑79 decided on 29‑12‑1979 and E. D. A. No. 42 of 1978‑79 dated 2‑1‑1980 that the Depart ment has no reasons to make own estimate of cash‑in‑hand and the account able persons are in the best position to say how much cash was available at the time of death of the deceased. The Department is not to fix cash‑in- hand arbitrarily just on the basis of assumptions. The adopted estimate o cash‑in‑hand having not been based on any cogent and plausible reasons; following our consistent view of the earlier decisions, we modify the impugned order accepting the declared cash‑in‑hand.

2. Stocks and shares (Quoted in Stock Exchange).‑In ED‑I the account able persons had disclosed 740 N. I. T. units. The Assessing Officer, men tioned the same figure of units in the proposal but in the assessment order figure was erroneously adopted at

940. The D. R. who himself happened to be the Assessing Officer, on perusal of record conceded that a typographical mistake has occurred. We direct :hat number of N. I. T. units shall be adopted at 740.

3. Sacks and shares (Not Quoted on Stock Exchange): ‑As per last wealth‑statement of the deceased, the accountable persons disclosed 1250 shares of Messrs Kashmir Agencies Limited and 25 shares of Messrs United Management Limited having face value of Rs. 100 each and total valuation at Rs. 1,25,000, and Rs. 2,

500. In addition to that 70 shares of Messrs Sugar & Seed Exchange, having valuation of Rs. 4,350 were also declared. Total valuation of the deceased's shares was at Rs. 1,31,

850. In the proposal the Assessing Officer did not specify any amount, rather observed:‑ "Estimated in the absence of break‑up value of these shares. This will be modified on the presentation of balance‑sheet of these Companies as at the date of death of the deceased: The accountable persons had submitted balance‑sheets of the Companies alongwith letter dated 21‑11‑1978. The Assessing Officer after narrating the appellant's plea for adopting break‑up value held that in the case of Private Limited Companies, break‑up value is not a true index of principal value of shares. Declared valuation was adopted. The appellants have contested the adopted valuation in respect of shares of Messrs K. A. L. and Messrs U. M. L. It was stated that the Assessing Officer fell in error in determining valuation on the basis of face value whereas the shares being of Private Limited Companies not quoted on the Stock Exchange, break‑up value had to be adopted. We feel that the Assessing Officer has erred in adopting face value of the shares. In proposal, face valuation was proposed due to non‑availability of break‑up value but at the time of assessment, the appellants having furnished balance‑sheets of the Companies, the Assessing Officer erroneously field that break‑up value was not the true index of the principal value. Under section 18 of the Estate Duty Act, mode of determination of valuation of shares of private limited companies (not quoted on the Stock Exchange) has been prescribed as to be break‑up value. The appellants having furnished balance‑sheets of the Companies, there was no choice in the matter and the Assessing Officer was required to determine valuation of shares on the basis of break‑up value as per balance‑sheets. This view has already been expressed by the Tribunal in E. D. A. No. 5/KB of 1978‑79 reported in January, 1981, issue of Finance Taxation & Company Law Journal. In this view of the matter, the Assessing. Officer is directed to adopt valuation of shares of Messrs K. A. L. and Messrs U. M. L. on the basis of break‑up value as per balance sheets of these companies. Due to non‑availability of balance‑sheet, adopted valuation of 70 shares of Messrs S. & S. Exchange Ltd. was not contested by the appellants.

4. Minimum Guaranteed Return.‑On the acquired shares of Messrs U. I. L. the deceased held minimum guaranteed return of Rs. 4,07,

787. The accountable persons did not declare minimum guaranteed return as at the time of his death no such amount was receivable by the deceased from the G: C. of Pakistan. The Assessing Officer in the proposal stated that minimum guaranteed return would be estimated at Rs. 4,07,787 subject to admissibility of deductions made by Messrs U. I. L. The accountable persons objected to the proposal and produced a copy of ledger account of the deceased existing in the books. Plea of the accountable persons was that minimum guaranteed return stood merged in the estate of the deceased. The Assessing Officer included the entire amount in the estate of the deceased holding that the accountable persons had disputed the adjustments made by Messrs U. I. L. The Assessing. Officer after adding entire amount of minimum guaranteed return to the estate of the deceased did not allow the liability of Rs. 3,12,529 which the deceased admittedly owned to Messrs U. I. L. The objection of the accountable persons is that the Assessing Officer erred in including the minimum guaranteed return in the estate of the deceased as the same stood duly adjusted against the payables of the deceased made by Messrs U. I. L. at Rs. 3,12,529 having been established, I there was no justification for inclusion of the same amount in the estate of the deceased. Reliance was placed on a copy of the deceased's ledger account as existing in the books of Messrs U. I. L. This document exists on the assessment record and a copy of the same was also placed on our record. As per account statement of the deceased ending on 31‑12‑1977 a sum of Rs. 4,07,787 was credited to the deceased's account in three instalments. On 2‑9‑1973, the deceased owned an amount of Its. 3,12,529 to Messrs U.

1. L. who had adjusted that amount against the minimum guaranteed return receivable deceased on two occasions. From minimum guaranteed return up to 30‑6‑1975 was adjusted out of minimum guaranteed return upto‑ 30‑6‑1975 a sum of Rs. 2,51,115, was adjusted. Balance amount of Rs. 1,44,375 was adjusted out of minimum guaranteed return of 1975‑76 Messrs U. I. L. having been taken over by the Government of Pakistan on 2‑9‑1973, the payables of the deceased had to be adjusted. The earlier wealth‑statement of the deceased accepted in Income‑tax proceedings also confirms this liability. In addition to that wife and two sons of the deceased also owned some amount to Messrs U. I. L. The wife and two sons of the deceased were liable to pay to Messrs U. I. L. a sum of Rs. 37,337, Rs. 35,065, and Rs. 25,000, respectively and on 30‑6‑1977 their accounts were adjusted by Messrs U. I. L. against the deceased's credit balance on account of receipts of minimum guaranteed return. At the time of death, final balance of the deceased in the books of Messrs United Ind. Ltd. was at Rs. 12,

261. After perusal of copy of personal account of the deceased we are of the view that the Assessing Officer proceeded in a slipshod manner. There did not exist any evidence on record to establish that the accountable persons had disputed the adjustments. Copy of the personal account of the deceased establishes the position to be the other way round. The ED‑I included the amounts receivable from wife and two sons at Rs. 33,337; Rs. 35,065 and Rs. 25,

000. There was no justifica tion for inclusion of whole of the minimum guaranteed return in the estate of the deceased. Wealth‑statements of wife and two sons of the deceased should have been perused regarding adjustment of total sum of Rs. 97,042 against deceased's credit balance on account of receipts of minimum guaranteed return. We have no hesitation in holding that there was no separate available amount of minimum guaranteed return meriting inclusion in the estate of the deceased. The Assessing Officer erred on this issue and acted hurriedly iii including the entire amount in the estate of the deceased on erroneous finding that the accountable persons were disputing adjustments. In fact, there was no such dispute. As per copy of accounts statement final balance of the deceased in the books of Messrs United Industries Limited was at Rs. 12,

261. In a somewhat similar situation in E. D. A. No. 34 of 1978‑79 dated 11‑5‑1981 filed by accountable persons of real brother of the deceased, the Tribunal while dealing with minimum guaranteed return and adjustments of payables of the deceased in that case towards Messrs U. I. L. field by majority judgment as under:‑ "In regard to liabilities of Rs. 3,73,001 adjusted by the Ghee Corpora tion of Pakistan the DCED is directed to make a fresh enquiry so as to satisfy himself as to whether or not these liabilities warranted allowance in terms of section 45 and to allow the accountable persons sufficient opportunity to adduce evidence in respect of the alleged debts of the deceased for which the Ghee Corporation of Pakistan has made adjustment out of the Minimum Guaranteed Return and also to call for the necessary details and requisite evidence, if any from the G. C. P. by invoking if the circumstances so demand, the power vested in him under section 54 of the Estate Duty Act for proper dispensation of justice." In this view of the matter, we set aside the impugned order and remit back the issue of minimum guaranteed return for de novo decision in the light of our observations and earlier decision mentioned above.

5. Business capital.‑In accordance with the wealth statement last furnished by the deceased, the accountable persons declared deceased's capital in two firms namely; Messrs U. I. L. and Messrs F. T. M. at Rs. 87,575 and Rs. 43,825, respectively Before the Assessing Officer, the accountable persons submitted by letter dated 27‑11‑1978 that both these firms having been dissolved, no assets were left from which these amounts could be recovered by the deceased. These two credit balances wire claimed by the accountable persons not to be part of the estate of the deceased. Messrs U. I. L. was dissolved on 11‑12‑1974 and a copy of dissolution deed was submitted before the Assessing Officer. Similarly, Messrs F. T. M. was dissolved in the year 1964. The accountable persons pleaded that the dissolu tion of the firms had taken place much before the death of the deceased. The Assessing Officer did not agree with the contention of the accountable persons and it was held that in case credit balance was a bad debt it should have been written off on 31‑12‑1974 in the case of Messrs U. I. L. That having not been done by the deceased there must have been some assets of the firm where from deceased could have recovered his money. In respect of F. T. M. it was held that credit balance may be a receivable amount by the deceased from legal heirs of M. A. H. Muggo deceased who had sold the plot underneath the textile mills on 25‑3‑1965. The plea of the accountable persons was that the alleged recoverable capital in the defunct firm was simply a dead balance and recovery of these two amounts was barred by limitation even at the time of death of the deceased either from ex‑debtors or ex‑partners of the firm having debit balance if any. In the Estate Duty appeal of the accountable persons of late Mr. A. H. M. real brother of the deceased, issue regarding assessment of credit balance in F. T. M. also arose. The Tribunal in E. D. A. No. 34 of 1978‑79 decided on 11‑5‑1981 held asunder :‑‑ Share in Frontier, Textile Mills-‑Against the declared amount of Rs. 28,636 assessed figure stands at Rs. 5,00,

000. The learned counsel explained that the assessee was the partner of this firm but the same was dissolved on 30‑9‑1964 and, after disposal and division of assets, the assessee came to have a credit balance of Rs. 28,636 which could not be recovered because of the non‑availability of assets (or funds) of the defunct firm. The amount could easily be written off in the books but, for facility of reconciliation of wealth from year to year, it was shown as a receivable amount. This was done in the Estate Duty Return also although it apparently was a mistake and the amount should have been totally excluded as nothing passed on to accountable persons. The Assessing Officer did not accept dais plea and observed that the land on which the factory was constructed was over 10 kanals the valuation where of then taken at Rs. 5,00.007. The learned counsel produced before us documentary evidence in the shape of Sale Deed of this land to prove that on dissolution of the firm this asset had been disposed of (On 22‑3‑1965) at Rs. 1,00,000 and hence was not available at the time of the death of the deceased. The evidence now led before us had not been examined by the Assessing Officer. Moreover, it is not clear as on what basis the Assessing Officer still believed that 10 kanals of factory land was the property passing. We, therefore, set aside the matter quo ad hoc for fresh enquiry." After hearing the Representatives of both the parties, we feel that there was no justification for inclusion of sum of Rs. 87,535 in the estate of the deceased as recoverable from Messrs U.I.L. because this amount was irrecover able even during lifetime of the deceased. There being no assets of the defunct firm and recovery of the amount being otherwise barred by limitation at the time of death of the deceased from ex‑debtors or partners of the firm, the amount was erroneously added to the estate of the deceased. We delete the addition of Rs. 87,

538. As in the case of another deceased share holder of M/s. F. T. M. the matter has been set aside by the Tribunal, we vacate the impugned order regarding amount of Rs. 43,825 for decision de novo in the light of our above observations and decision given in E. D. A. No. 34 of 1978‑79.

6. Tractor.‑‑The deceased owned a Tractor. The accountable persons declared its valuation at Rs. 37,500 but claimed exemption under section 25‑A (2) of the Estate Duty Act. The Assessing Officer adopted the proposed valuation at Rs. 37,

500. It was held that extent of ownership of agricultural land of the deceased being four kanals three marlas only, there was no justific ation for maintenance of a Tractor. 1t, was concluded that the Tractor must have been used foe hiring out to other parties or for some non‑agricultural purposes. It was submitted on behalf of the accountable persons that under subsection 12) of section 25‑A of the Estate Duty Act, exempt: on was allowed to equipments or machinery needed by the deceased for raising agricultural produce. The case of the accountable persons was teat one son of the deceased owned substantial agricultural land and the Tractor owned by the deceased was used for raring agricultural produce therefrom. The contention of the accountable persons has some merits. In subsection (2) of section 25‑A, exemption is granted to machinery, equipment, implements etc., needed by the deceased for raising agricultural produce. Agricultural produce, can be raised by use of a Tractor from one's own land or by obtaining agricultural land on lease. The criterion is need and not ownership of the deceased. We cannot appreciate how the Assessing Officer has held that the Tractor could be used without a trolly for any purpose other than agriculture. Exemption envisaged by subsection (2) of section 25‑A is to the machinery needed for raising agricultural produce. The solitary ingredient required for exemption is the use of machinery by the deceased for raising agricultural produce and this could be achieved in three ways, firstly by self‑ownership of agricultural land, secondly by raising of agricultural produce from the land belonging to others and thirdly by renting out the agricultural machinery. Thus the scope of exemption of agricultural machinery is not co‑relateable with the extent of ownership of agricultural land of the deceased. A perusal of `Fard Jamabandi' produced by the accountable persons establishes that one son of the deceased owred 24 acres of agricultural land. The deceased might have been using the tractor for raising agricultural produce therefrom. The Assessing Officer thus erred in adding value of Tractor to the estate of the deceased, Exemption claimed b the accountable persons is allowed.

7. Liabilities.‑The accountable persons claimed liabilities of two types First was admitted liability of income tax, wealth tax and gift‑tax and second was of three creditors. Each item is dealt with as under :‑ Income‑tax liability.‑For the assessment . years 1977‑78 and 1978‑79, the Assessing Officer allowed the claimed liability of Rs. 2,55,

244. The grievance of the accountable persons is that liability for these two years has finally been created at Rs. 3,58,549 and as such the actual amount should be allowed. There can be no dispute regarding this grievance. We direct the Assessing Officer to allow the actual amount of liability at Rs. 3,59,549 after verification from the income‑tax assessment orders, Wealth tax liability.‑The Assessing Officer allowed the claimed liability for the charge year 1977‑78 at Rs. 3,

295. It was submitted on behalf of the accountable persons that wealth‑tax liability for the charge year 1973-74 through 1977‑78 is likely to be enhanced resulting ire creation of substantial demand and as such the Assessing Officer be directed to rectify the assessment and allow the actual amount of wealth‑tax liability finally determined. We direct accordingly. Gift tax liability.‑The Assessing Office held the gift made by the deceased to be invalid. Liability of entire gift‑tax paid by tae accountable persons at Rs. 7,57,180 was disallowed. In view our decision regarding the gifts made by the deceased to be valid and not covered by sections 8 and 9 of the Estate Duty Act, the liability of gift‑tax paid on behalf of the deceased is allowable. The claimed gift tax liability is allowed. Other creditors.‑The accountable persons claimed the following liabilities.

1. M/s. Kashmir Agencies Ltd Rs. 3,07,108

2. Mian A. Hamid Puri. Rs. 4,549

3. Mian A. Hamid Muggo Rs. 64,887 The Assessing Officer brushed aside the claim of other liabilities holding as under "Other claims are disallowed subject to proof of payment and subsequent rectification under section 74‑B of the Estate Duty Act." It was stated on behalf of the accountable persons that certificates from the first two creditors t4 establish that the deceased owed Rs.3,07,108 and Rs.4,549 were submitted and the Assessing Officer erred in holding that no evidence was adduced. In support of the claimed liability of Mian A. Hamid Muggo, it was contended that in ED‑1 of Mian A. Hamid Muggo a sum of Rs. 50,482 was shown as recoverable from the deceased. After the death of M. A. H. Muggo M/s. U. I. L. transferred credit balance of Rs. 14,422,33 towards personal account of M. A. H. Muggo to recover their loan from the latter. Statement of Account of M/s. U. I. L. was produced in support of this plea. The contention of the accountable persons was that at the time of death the deceased owed a sum of Rs. 64,887.37 to the legal heirs of late M. A. H. Muggo. This grievance should have been scrutitlised in detail by the Assessing Officer. The accountable person had furnished full details of this claim to the Assessing Officer vide letter dated 9‑10‑1978. Regarding liability towards M/s. Kashmir Agencies Limited, the accountable person had produced a certificate from this Limited Company before the Assessing Officer alongwith letter dated 9‑10‑1978. Similar was the position in respect of liability of Rs. 4,549 of Mian A. H. P. We direct the Assessing Officer to re‑ascertain the claim of the accountable persons regarding other three creditors in the light of evidence already available and subject to notice for production of additional evidence, if any.

8. Gift of compensation Bonds of United Industries Ltd.‑The deceased held 1,31,250 ordinary shares of face value of Rs. 10 each of M/s. U. I. L. The business of the company was Ghee production. The Government of Pakistan nationalised this company under the Hyderogenated Vegetable Oil (Control & Development) Act, 1973 on 2‑9‑1973. Management of the acquired units was taken over by the Ghee Corporation of .Pakistan but previous name and title of the acquired unit was continued. The shares of the deceased were acquired and his compensation was determined at Rs. 30,95,

662. On 31‑12‑1976 Ghee Corporation of Pakistan intimated the deceased the fact of determination of the compensation and issued Entitlement Certificate as well. The deceased did not obtain the compensation bonds as Writ Petition No. 962 of 1974 challenging the acquisition of the Ghee Company was pending in the Lahore High Court, Lahore. The compensation bonds remained lying with Ghee Corporation of Pakistan. On 29‑8‑1977, the deceased verbally gifted the entire receivable compen sation bonds to his wife and two sons. Value of compensation bonds gifted to wife was at Rs. 95,600 and each son was gifted compensation bonds worth Rs. 15,00,

000. On the same date, i. e. 29‑8‑1977 the deceased is stated to have intimated the Managing Director of M/s. U. I. L. the fact of gifts requesting for transfer of possession of compensation bonds in the name of the donees in‑the given ratio. This letter was depatched vide postal receipt No.

892. Copies of the letter and postal receipt were placed on our record. On the next date i.e. 30‑8‑1977 three memorandums of gifts were executed. by the deceased to reduce in writing the factum of gifts Acceptance of the donees was also recorded in each deed. Two, persons had signed as witnesses. Each deed was attested by M. M. A. Advocate, Faisalabad. The deceased having died on 16‑9‑1977, the accountable persona on 15‑7‑1978 filed gift‑tax return duly signed by the deceased and paid admitted liability of gift‑tax demand of Rs.7,57,

180. Finally on 10‑10‑78 M/s. U. I. L. in compliance to the written request of the deceased dated 29‑8‑1977, issued compensation bonds to all the three donees in the given ratio. The Assessing Officer did not accept the ,plea of' gifts mach: by the deceased and included the entire amount of compensation bonds at Rs. 30,95,600 in the estate of deceased. For determining the crucial and controvertial matter of gifts following issues are to be resolved :‑ Legal.‑(i) Whether the gifts made by the deceased were in contemplation of death and were covered by section 8 of the Estate Duty Act ? (ii) Whether section 9 of the Estate Duty, Act is applicable to the gifts made by the deceased ? (iii) Whether possession of the gifted property was legally delivered to the donees. Factual. Whether on the basis of evidence available on record the gifts made by the deceased were valid. Before discussion, we would like to bring on record the relevant pro visions of law. Section 5(i) (ix) of the Grid Tax Act (Exemption in respect of certain gifts).‑Gift tax shall not be charged under this Act in respect of the gifts made by any person in contemplation of death." The words "gifts made in contemplation of death" have been defined in section 191(2) of the Succession Act, 1925, as under :‑ "The gifts said to be made in contemplation of death where a man who is ill and expects to die shortly of his illness, delivers to another the possession of any movable property to keep as a grit in the case, the donor shall die of that illness." The necessary requirements of gifts made in contemplation of death are illness of the donor expectation to die shortly of that illness delivery of possession of movable property as a gift and death of the donor as a result of that illness. The Assessing Officer held that the gifts having been made by the deceased in contemplation of death were hit by provisions of section 8 of the Estate Duty Act and shall be deemed to have passed on the donor's death. For arriving at this conclusion, it was observed that the deceased was a know heart patient and had also undergone a heart surgery. The Assessing Office inferred that the deceased being a patient of incurable disease must have acted under the fear of death. This finding of the Assessing Officer has been challenged as to be illegal, erroneous and contrary to the evidence on record. At the outset, we would like to observe that heart attack, heart ailment or heart surgery does not necessarily mean immediate death. Modern medical treatment is most advanced. People have survived for years even after heart attack or heart surgery. Various highly placed persons are normally functioning even after "by pass" operations of heart. The case of the accountable persons was that two days before the date of gifts i.e. on 27‑8‑1977 the deceased who was hale and hearty bad appeared in person before the Assessing Officer, who was then I: T. O., Companies Circle, Faisalabad. The Assessing Officer conceded this factual position, the same having been incorporated by him in the Income‑tax Assessment Order. The other evidence produced in this behalf was copy of letter dated 5‑9‑1977 from Messrs Burhan Engineering Company Limited, Kye addressed to the deceased confirming his telephonic conversation regarding installation of 100 Tons Edible Oil Plant. This letter establishes that some where near about 5‑9‑1977 the deceased had a telephonic talk for procuring information in connection with installation of Edible Oil Plant. On the basis of that telephonic conversation, Messrs Burhan Engineering Company Limited, Karachi had forwarded the inquiry made by the deceased to the concerned parties in West Germany. Reliance was also placed on another similar letter dated 30‑8‑1977 from Messrs Shah Nawaz Limited, Karachi, addressed to the deceased confirming his telephonic talk in connection with installation of Vegetable Ghee Manufacturing Unit. The other piece of evidence produced in this behalf was agreement dated 29‑8‑1977 made between the deceased as Managing Director of Messrs U. C. M. Jauharabad and Mr. Abdul Haque Butt, regarding the letter's appointment as Electrical Engineer in the Mills. The deceased had signed this agreement on 29‑8‑1977. Similarly, another appointment was given by the deceased on 31‑8‑1977 to Mr. M. Sarwar, as Shift Incharge and documentary evidence in that respect was also produced. On the basis of this evidence, the case of the accountable persons is that the deceased was having good health and was continuing his normal activities of life before and even after the date of gifts. The Assessing Officer who himself appeared to defend his own order, could not point out from record a single piece of evidence in support of his conclusion regarding the gifts to have been covered by section 8 of the Estate Duty Act. We have no hesitation in holding that there was no evidence on record to establish that the deceased was ill or had any apprehension of death on the date of making of gifts. On the other hand, the Assessing Officer, without giving his mind for treating the gifts as to have been made in contemplation of death, did not confront the accountable persons on this issue. The result is that the accountable persons were deprived of the opportunity of production of evidence to rebut the unforeseen conclusion of the Assessing Officer. There being no notice to the accountable persons for treating the gifts as to be covered by provisions of section 8 of the Estate Duty Act, we have entertained the evidence on this issue. This we have done as legal aspect of the gifts is also against the revenue and as per our discussion in the subsequent part of this order, the gifts made by the deceased do not come within the legal ambit of gifts mortis causa. After taking into consideration the evidence in the form of letters from Messrs Burhan Engineering Company Limited Karachi Messrs Shah Nawaz Limited, Karachi, appointment letter of Shift Incharge and agreement executed by the deceased on 29‑8‑1977 with Mr. Abdul Haque Butt, we Conclude that on the date of gifts and even thereafter the deceased was continuing his normal activities and the gifts were not made in contemplation of death. The fact of appearance of the decea sed in person on 27‑8‑1977 before the Assessing Officer, who was at' that time I.‑T. O. Companies Circle, Faisalabad, also lends full support to our con clusion. The telephonic activities as is evident from documentary evidence fully establish that the deceased was in good health. In case, the deceased was in contemplation of death how could it b:, possible for him to hah telephonic conversation with two different companies regarding installation of Edible Oil Plant. A dying man will not worry about the worldly affairs rather he would prefer to die while praying to God seeking forgivenes particularly in the moments close to his death. In the instant case, the deceased after making gifts on 29‑8‑1977 undertook his regular business a Managing Director of U. C. M. L. As per medical evidence on record the deceased got heart attack on 9‑9‑1977. In other words he functioned as a normal man for a period of 11 days after execution of gift deeds. Or this basis, we hold that documentary and circumstantial evidence establishes that the deceased was normally functioning before and after the execution of gift deeds. The Assessing Officer also failed to appreciate the true legal position of the gifts mortis causa. In accordance with the definition of gifts morn causa as given in section 191 of the Succession Act, the donor at the time of making the gifts must be suffering from "marzulmaut", In explanation to section 135 of D. F. Mullah's Book titled as "Principles of Muhammadan Law" a marzu1maut has been defined as a malady which includes and apprehension of death in the person suffering from it and which eventually results in his death. In the same book marzulmaut has been defined a; under :‑ "It is an essential condition of marzulmaut, i.e. death illness, that the person suffering from the mare (malady) must be under an apprehension of maut (death)." "The most valid definition of death illness is that it is one which it is highly probable, will issue fatally", Baillie

552. Where the malady is of long continuance, as for instance, consumption or albuminuria, and there is no immediate apprehension of death, the malady is .not marzulmaut ; but it may become marzu1maut if it subsequently reaches such a stage as to render death highly probable, and does .in fact result in death, (1918) 40 All. 238 (243‑244) ; 51 L C 638). According to the Hedaya a malady is said to be of "long continuation", if it has lasted a year ; a disease that has lasted a year does not constitute marzulmaut, for the patient has become familiarized to his disease, which is not then accounted as sickness. Hedaya,

685. But "this limit of one year does not constitute a hard and fast rule, and it may mean a period of about one year". In short, a gift must be deemed to be made during marzulmaut, if as observed by the Privy Council, it was made "under pressure of the sense of the imminence of death". To constitute a marzulmaut, there must be‑ (i) proximate danger of death, so that there is a preponderance o apprehension of death ; (ii) some degree of subjective apprehension of death in the mind of th sick person and ; (iii) some external indicata chief among which would be inability to attend to ordinary avocations although his attending to ordinary avocation does not conclusively prove that he was not suffering fro mamulmaut. It is not necessary, however, to come to a definite finding that the disease which caused the apprehension of death was the immediate cause of death. "Total evidence and all circumstances should be examined. A finding of gift being made in marzu1maut cannot be given when it is not alleged, in the plaint or raised at the trial. It is not for the Court to raise the point suo motu". Abdul Hafiz Beg v. Sahebi ((73) A. Bom. 165), Bhoona Bi v. Gujar Bi ((73) A. Mad. 153). Daulat Ram Prem, in his famuos Judicial Dictionary, under the definition of marzu1maut explains as under :‑ "If a malady, has continued for a sufficiently long time and has in fact, become a part of the physical system of the patient, so that he has become more or less accustomed to it and has subsequently lost all fear of death on its score, it would cease to be marzulmaut. The crux in all these cases is to find out the state of the mind of the deceased in order to ascertain whether there was such a preponderance of apprehension that death at the time of execution of the deed in question seemed to him more than life." (30 Bom 537, 31 Born. 264, 1925 Cal 537, 35 Cal. 271, 1926 Cal. 401, 1937 Cal. 500, 1957 All. 395, 40 All. 23, 235). A perusal of statutory requirements of marzu1maut leaves us in no doubt that the required conditions therein did not cover the case of the deceased and he was not suffering from marzu1maut at the time of making of the gifts. The deceased was having heart trouble for the last so many years and had even undergone a heart surgery. He was not only attend ing to his regular activities of business on the date of gifts; rather was negotiating for import of machinery for expansion of his business. Even, two days before the gifts, the deceased personally appeared before the I.‑T. O. Companies Circle, Faisalabad. Mere fact that the deceased was a heart patient was not enough to conclude that at the time of making of gifts, he was suffering from marzulmaut. A gift mortis causa is to be one which was made by the donor in peril of his death. In the instant case, there was no evidence before the Assessing Officer for application of provi sions of section 8 of the Estate Duty Act; rather as per evidence on record, the deceased's activities proved that he was not suffering from any trouble constituting marzulmaut. Application of section 6 of the Estate Duty Act.‑The Assessing Officer held that the gifts made by the deceased were covered by provisions of sec tion 9 of the Estate Duty Act. The solitary reason for arriving at this conclusion was that according to the amended section, such gifts shall be deemed to pass on death if gift tax has not been paid. The Assessing Officer interpreted the provision of payment of gift tax as to mean "that the gift tax had to be paid by the deceased during his lifetime". In other words gift tax paid by the accountable persons/donees was of no avail and will not prevent the property from passing. In this case, gift tax having been paid after the death of the deceased, the gifts were held to be governed by section

9. It is pertinent to bring on record the provisions of section 9 of the Estate Duty Act, which run as under :‑ "Property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos. whether by way of transfer, delivery, declaration of trust, settlement upon persons in succession or otherwise, which shall not have been bona fide made (five years) or more before the death of the deceased (and on which gift tax has not been paid) shall be deemed to pass on the death." In plain words three conditions under which property would be deemed to pass on death of the deceased are (i) the gift should ‑not be bona fide. (ii) the gift should not be beyond five year, or more: and (iii) gift tax has not been paid, The last condition was added by the Finance Act, 1974. In the instant case, the Assessing Officer, while bringing the case within the ambit of section 9, did not raise any objection regarding conditions (i) end (ii). The solitary objection was that condition No. (iii) remained uncomplied with. The Assessing Officer interpreted the word "paid" as used in condition No. (iii) as to mean that "paid by the donor in his lifetime". We find the interpreta tion given by the Assessing Officer to the word "paid" as used in section 9, as to be erroneous. Interpretation has been given just on assumptions. Before dealing with the interpretation of provisions of section 9, it is pertinent to take into consideration and discuss the decided cases on this issue. In (1969) 40 Tax. 3 (Trib.), section 9 of the Estate Duty Act came up for consideration. The brief facts of that case were that on 19‑6‑1975 a gift of Rs.55,000 was made by a wife to husband. The wife died on 16‑5‑1977 and the Accountable Person. before the Deputy Controller of Estate Duty claimed that no gift‑tax was leviable on the Gift of Rs. 50,000 as it was exempt under section 5(1)(vi) of the gift‑tax Act being a gift from a wife to husband. Regarding the balance gift of Rs. 5,000 exemption was claimed under section 5(2) of the Gift Tax Act. The Tribunal while making general discussion on provisions of section 9, held as under :‑ "We, however, find that under the scheme of the Estate Duty Act gifts are always deemed to be property passing unless they fulfils the follow ing three conditions:‑‑ (a) The gifts should have been bona fide. (b) The gifts should have been arisen more than five years before the death of the deceased. (c) Gift tax should have been paid thereon. All these conditions appear to us to be cumulative in nature and there fore if the gift does not fulfil condition (a) i.e. the gift is not found to be bona fide, it will be deemed to be property passing and the other two tests of time limit and the payment of gift tax would not be required to be applied. However, such of the gifts as are made bona fide will have to undergo the other two tests in order to attract the exemption, so that with the fulfillment of the first condition of the gift being bona fide, the remaining two conditions would be the limitation within which they have been made, and the payment of the gift tax thereon. Such gifts are bona fide and fulfil the first condition but‑are not made beyond the limitation of time will stall not attract the exemption and it would not be necessary to test the fulfilment of the third condition in respect thereof. Now the gifts which fulfils the first two conditions of having been made bona fide and also more than five years before the death of the deceased will still be deemed to be property passing unless the third condition regarding the payment of gift tax is also fulfilled. It would, therefore, become necessary that the third condition is also fulfilled to avail of the exemption provided, These are all three negative conditions and must be fulfilled cumu latively." A perusal of the Tribunal's order clearly establishes that amendment made in section 9 on 1‑7‑1974 by insertion of the words "and on which gift tax has not been paid" was not strictly involved in that case. The Tribunal neither considered nor dealt with that amendment specifically. There does not exist any discussion, interpretation or finding regarding scope of amendment made on 1‑7‑1974. The reported case has thus no bearing on the issue involved. There exists another unreported decision of the Tribunal in E. D. A. No. 19/K. B. of 1975‑76 and E. D. A. No. 8/K B of 1976‑

77. The facts therein were as these. One Mr. Ismail Haji Suleman died on 25‑8‑1974. The deceased had gifts of Rs. 3,70,000 on 2‑2‑1973 and 1‑1‑1974 The gifts fell in the assessment years 1973‑74 and 1974‑

75. The Assessing Officer while assessing assessment on 25‑11‑1975 held that at time of death of the deceased gifted amount passed on to the accountable persons as the gifts were made prior to the passing of the Finance Act, 1974. The Accountable persons filed E. D. A. No. 19/K B of 1975‑76 against that assessment. During the pendency of appeal before the Tribunal, the assessment was reopened on 17‑3‑1976 by issuance of notice under section 61 for inclusion of gifts other than that of Rs. 3,70,

000. The Assessing Officer vide order dated 15‑6-1976 included other gifts in the estate of the deceased and the Accountable persons again took up the matter to the Tribunal in E. D. A. No. 8/K‑B of 1976‑

77. Both these appeals were decided by the same combined order. Regarding gifts made on 2‑2‑1973 and 1‑1‑1974 after recording the contentions of the parties, the learned Judicial Member (as he then was) held as under :‑ " .We do not find force in the contention of the learned counsel for the appellant. No doubt, there is no provision in the Gift Tax Act, which makes it obligatory on the part of the donor to pay on making the gift or before the date on which he furnishes the gift tax return, the amount of tax payable on the basis of the said return. But it does not also at the same time debar the payment of gift tax in advance on making the gift inter vivos or at any time debar the payment of gift‑tax in advance on making the gift inter vivos or at any time subsequently. On the contrary by virtue of section 18 of the Gift Tax Act, as submitted by Mr. Ali Athar himself, the donor, in certain circumstances, is not only given credit of the amount of tax paid in the Treasury within 15 days of his making the gift but in addition thereto he is also given credit for an amount equal to 10 % of the amount of tax so paid. Section 9 of the Estate Duty Act, as it stands today and also stood on the date of the death of the deceased, clearly provides that the gifts made inter vivos within three years or more of the death of the testator and on which gift‑tax has not been paid, shall be deemed to pass on his death. The following three conditions are, therefore, to be, fulfilled, if a gift made inter vivos is to escape the levy of estate duty under the Estate Duty Act :‑ (i) The gift must have been made bona fide, except in the case of gifts made for public or for any charitable purpose, where the making of the gift three months prior to the donor's death is sufficient. (ii) It must have been made more than three years before the death of the donor, and (iii) Gift Tax must have been paid on it . . . . .. In the instant case condition Nos. (if) and (iii) above‑noted have not been satisfied. So far as condition No. (i) is concerned, the learned D. C. E. D. has not doubted the genuineness of the gift and hence he seems to have held it to have been duly fulfilled. The argument of the learned D. R. that the amendment introduced in section 9 of the Estate Duty Act by the Finance Act, 1974, is to the benefit of the donor, or in case of his death, to the Accountable persons, is patently misconceived. As a matter of fact the Legislature by inserting the words `and on which gift tax has not been paid has put a further condition to be fulfilled in order to take the property out of the estate of the deceased for the purpose of levy of Estate Duty. We are, therefore, clearly of the view that the gifts in question having been made within three years of "he death of the deceased and on which gift has not been paid, the gifted property is to be deemed to have passed on the death of the deceased. The learned D.C.E.D. was, there fore, fully justified in subjecting to estate duty the amounts of the two gifts made on 2‑2‑1973 and 1‑1‑1974 by the deceased in 1973‑74 and 1974‑75." The learned Accountant Member, though, agreed with the conclusion but assigned his own reasons and the relevant portion of his order regarding gift of Rs. 3,70,000 is as under. " ..So far as the gift of Rs. 3,70,000 was concerned I agree that it did pass, but here I like to express my own humble view on the matter. The amendment of 1974 in section 9 of the Estate Duty Act tried to soften the rigours of the overriding provision. By inserting the words "and on which gift‑tax has not been paid" the framers of the law have provided for an exit window for escaping from the limitation put on by the period of three years. Therefore, if the gift -tax has been paid on a gift made within three years prior to the donor's death, the property shall not `pass'. In the instant case, as the gift -tax was not paid before the death of the .donor, the property passed for the purpose of the Estate Duty Act. The material point of time for deciding the passing of the estate was the donor's death. In the instant case, as no gift tax was paid upto the time when the donor died, the property passed." There occurred difference of opinion amongst the learned Members regarding re‑opening of the assessment but that controversy has no bearing upon the issue involved in this case. We find that in the unreported judgment exhaustive interpretation of the amendment made on 1‑7‑1974 by insertion of provision "and on which gift tax has been paid" has not been made. The learned Judicial Member (as he then was) made a passing reference that in the gift involved in that case the gifted amount passed on to the Account able Persons as gift tax was not paid therein. In that case, condition No. (ii) of section 9 also remained unfulfilled. The only other observation is that the Legislature by inserting the words "has put a further condition to be fulfilled in order to take the property out of the estate of the deceased." The scope and extent of the amendment made on 1‑7‑1974 was not specifically examined and considered. The true legal position could not be thrashed out as none of the parties argued before the learned Judicial Member that section 9 of the Estate Duty Act was an exception to the General Law, otherwise gifted property ordinarily passes on to the donee on completion of requirements of a gift and as such the same cannot be said to pass on to the accountable persons of a deceased donor. As condition No. (ii) of section 9 of the Estate Duty Act was not fulfilled in that case, the third condition regarding payment of gift‑tax could not be elaborately examined and discussed. The learned Judicial Member (as he then was) did not discuss the scope. Of amendment made on 1‑7‑1974 rather just observed that the amen mend put a further condition to be fulfilled in order to take the property out of the estate of the deceased for the purpose of levy of estate duty. The issue was decided just in accordance with the facts and circumstances of that case. The learned Accountant Member was of the view that gift‑tax had to be paid before death of the deceased donor. No reason, whatsoever, was assigned by the learned Accountant Member. There being no elaborate consideration and discussion of extent and scope of the amendment made by insertion of provision of payment of gift‑tax in section 9 by Finance Act, 1974, we deem it appropriate to consider the legal aspects concerning this amendment. The unreported decision being neither exhaustive nor precise on the issue involved, with utmost respect, we cannot follow the con clusion arrived at therein. The matter of interpretation of amendment made by Finance Act, 1974 also became subject‑matter of discussion in EDA No. 8/KB of 1979‑80 wherein the same learned Accountant Member adopted the same view as of E. D. A. No. 8/KB of 1977‑78 whereas another learned Judicial Member gave different interpretation to the amendment made on 1‑7‑1974. The issue in that case also became a matter of difference of opinion and the matter is still stated to be pending. However, the interpretation given by the learned Judicial Member in E. D. A. No. 8/KB of 1979‑80 is fully exhaustive. Relevant conclusion of that order is as follows :‑ "Section 9 does not provide any point of time as to when the gift‑tax has been paid." The word "paid" is not a word of science or art and it has tot taken in its simplest meaning. As per Chambers 20th Century Dictionary, ;nr aping of the word "paid" are to satisfy, to give what is due in satisfaction of debt, in exchange in compensation. In other words the word paid will mean to pay or satisfy what is due out of the payer. If the intention of the Legis lature was to make the word "paid" co‑reiateable with the words "paid by the donor within his lifetime", a different wording. had to be used in this behalf. In that case, the wording should have been "and on which gift‑tax has not been paid by the donor within his lifetime: Amendment made by Finance Act, 1974, in section 9 of the Estate Duty Act making provision for payment of gift tax does not specify any point of time as to when the gift‑tax has to be paid. In the absence of such provision, simple interpretation will be that if gift tax has been paid in respect of a particular gift, it will go out of the ambit of section 9 of the Estate Duty Act. Amended section 9 excludes the gifts from its mischief although made within five years but on which gift‑tax has been paid. Section 9 of the Estate Duty Act is an exception to the General Law, Ordinarily a gifted property cannot pass on the death of the donor and it is only by fiction of law created by section 9 under which property is being passed on to the Accountable persons by the deeming clause. Section 9 having been drafted quite contrary to that provisions of General Law, exception is to be proved by complying with the prescribed conditions. Under sections 29 and 30 of the Gift Tax Act, if the gift‑tax was not paid by the donor in his lifetime; it would constitute a charge on the property gifted and would also be recoverable from the donee to the extent of gifted property received by him. If under the Gift Tax Act, gift Tax paid after the assessment could be deemed to have been properly paid then, how could it be presumed that the word "paid" used in section 9 of the Estate Duty Act, will mean payment of gift‑tax by the deceased before his death. Apparently wordl "paid" used in section 9 of the Estate Duty Act will mean paid as required under the Gift Tax Act. The Assessing Officer unnecessarily over stretched the interpretation of section 9 so as to think that payment of gift tax should have been made by the deceased in his lifetime. The Legislature having not provided this interpretation, it cannot be introduced in the text of they Act. In the case of Director of Public Province v. Bhagwan ((1970) 3 All. E R 97=3 W L R 501 (512) (HL)) it was held :‑ "The constitutional function of the Courts in relation to enacted law is limited to interpreting and applying it. It is the duty of the Judge to ascertain what are the means which Parliament has enacted by the Act. In construing the enacting words he may take account of what the Act discloses as the purpose that those means were intended to achieve and in the case of ambiguity alone, he may interpret them in the sense in which they are most likely to promote than hinder its achievement. But it is no function of a Judge to add to the means which Parliament has enacted in derogation of rights which citizens previously enjoyed at common Law, because he thinks that the particular case in which he has to apply the Act demonstrates that those means are not adequate to achieve what he conceives to be the policy of the Act." These observations are based on sound principles of interpretation. Maxwell in his book on the Interpretation of Statutes, page .208 (12th Edition) states that the Judge should not intend injustice or absurdity to the Legislature. At page 230 of the same book it has been stated that a Judge must make most equitable construction of a provision of law which amounts nothing more than a construction in accordance with the intention of the Legislature. In (1957) 32 I T R 418, it wag laid down that in fiscal statutes in case, of doubt, the construction most beneficial to the subject should be adopted. The well‑established principle of law is that fiscal statutes are always construed strictly and no one can travel beyond the language used in the enactment. Lastly, we would like to point out that while making amendment in section 9 on 1‑7‑1974, the Legislature also made corresponding amendment in section 11‑A of the Estate Duty Act and omitted section 9 therefrom. On this issue, with respect, we follow the views of the learned Judicial Member expressed it EDA No. 8/KB of 1979‑80, relevant portion of which runs as under :‑ .....Section 11‑A of the Estate Duty Act before amendment made by the Finance Act, 1974, provided that where there the gifted property should be deemed to have been passed on the death of the deceased under sections 9, 10 and 11, credit had to be given for the amount of tax which was payable in respect of gifted property under the Gift‑tax Act. However section 9 was omitted in section 11‑A by the same section of Finance Act, 1974, which made the addition of the words in section 9 in regard to the payment of gift‑tax. This also shows that the last condition in regard to the payment of gift tax has to be fulfilled alongwith other two conditions provided by section

9. If section 9 is interpreted and if any one of the conditions given therein is not fulfilled the property of the deceased would pass on his death, it would lead to anamolous situation. Supposing the gift tax is made bona fide, within five years of the death of the deceased and the gift tax has been paid. The property would deem to pass on the death of the deceased. But ironically in such situation though the gift‑tax had been paid no credit would be given for payment of gift‑tax as section 9 had been omitted from section 11‑A under which credit could be given for the payment of gift tax. Thus the accountable persons suffer doubly, firstly the gifted property though legally transfer red before the death of the deceased, is deemed to pass on them bringing the gifted property within the mischief of section 9 and at the same time no credit is given for the payment of gift‑tax. Obviously this could not be the intention of the Legislature which is evident from the omission of section 9 in section 11‑A by the same Finance Act which provided last condition of payment of gift tax under section 9." In this view of the matter, we hold that the Legislature having not prescribed that the payment of gift‑tax should be made by the donor during his lifetime, the Assessing Officer erred in attributing that meaning while interpreting section 9 of the Estate Duty Act. In this case the Accountable Persons had filed the gift‑tax return duly signed by the deceased in time and after assessment, gift tax of Rs. 7,57,180 was paid. Under amended provision of section 11‑A of the Estate Duty Act, no corresponding credit of gift‑tax paid is available to the accountable persons. Under these circumstances we hold‑ (i) that the amendment made in action 9 on 1‑7‑1974 does not mea that the gift tax has to be paid by the donor himself during his lifetime, (ii) that section 9, does not provide any point of time for making pay ment of gift tax. Relevant provisions of Gift‑tax Act for levy and payment of gift tax will be applicable, (iii) that if gift‑tax has been paid in accordance with the relevant provisions of Gift Tax Act, the gifted property shall not pass to the Accountable persons as part of estate of the deceased. Transfer of possession.‑Third legal issue involved is regarding valid delivery of possession of the gifted property. The Assessing Officer, held that compensation bonds were lying with the Ghee Corporation of Pakistan and the deceased not being in possession could not gift away something which be did not possess. It was also concluded that Messrs United Industries Limited having denied receipt of any intimation from the deceased regarding the gifts, the same were not legally made. The view of the Assessing Officer is misconceived. The deceased who had made gifts by execution of proper gift deeds had duly informed Messrs United Industries Limited for change of ownership and for issuance of separate compensation bonds in the names of the donees in the given ratio. A copy of the letter alongwith postal receipt of despatch was produced and placed on our record. The fact that administration of Messrs United Industries Limited had issued compensation bonds on 10‑10‑1978 in the names of the donees in the given ratio, leaves no room to doubt that the deceased had not intimated the factum of gift. If that was so, how could compensation bonds be issued by Messrs United Industries Limited, in the names of the donees without obtaining Succession Certificate. Even otherwise the objection of the Assessing 0fficer is vague as Messrs United Industries Limited held compensation bonds on behalf of the deceased as an Agent. Although, compensation bonds were not in physical possession of the deceased but they were undoubtedly in his constructive possession. For the purposes of valid gift, it is not necessary that actual physical possession should be given. Law considers constructive possession as to be sufficient. There is a long chain of authorities on this proposition. In the case Bhau Ram Jawaharmal v. C. I. T. ((1971) 82 I T R 722) ; it has been held that in order to sustain a gift it is not necessary that in every case there should be physical delivery of the amount gifted by the donor to the donee/donees. A transfer can be a effected in the books of the donee/donees firm by making a debit entry in the account of the donor and making corresponding credit entry in the account of the donees firm by making a debit entry in the account of the donor and making corresponding credit entry in the account of donees. Similar was the view expressed in another case as reported (1978) 37 Tax. 331 (H. C.) (India). The deceased, though not in physical possession of compensation bonds held constructive possession. For the purpose of gifts made, transfer of constructive possession was legally valid. The objection of the Assessing Officer thus stands overruled. Evidence regarding genuineness of the gifts.‑For examining the factual aspect of genuineness of the gift, the relevant facts are that the deceased had purchased various stamp papers on 3‑7‑1977 from Mr. Muhammad Aslam Stamp Vendor, District Courts, Faislabad. Gifts were verbally made on 29‑8‑1977 and gift deeds were executed on 30‑8‑1977. Mr. Muhammad Akram and Ch. Muhammad Amin had signed as witnesses and all the gift deeds were attested by an Advocate. In this behalf the accountable persons pro duced original gift deeds ; one of the witnesses to the execution of the gift deeds ; affidavit of second attesting witness ; one handwriting expert and affidavits of all the donees. The Assessing Officer examined the Stamp Vendor and F. I. A. handwriting expert as Court witness. The Stamp Vendor was examined behind the back of the accountable persons. The Assessing Officer doubted genuineness of the signatures of the deceased on the gift deeds. He referred the matter to F. I. A. handwriting expert, who was of the opinion that signatures of the deceased donor on all the gift deeds were not genuine. The documents were again referred to Mr. Abdul Hameed Butt, another handwriting expert, who categorically stated that the signatures were genuinely of the deceased donor. In view of contradictory opinions of two experts, the Assessing Officer himself assumed the role of an expert and without assigning any reasons concurred with the opinion of F. I. A. handwriting expert. We cannot appreciate, the findings of the Assessing Officer, in holding the signatures of the deceased donor on the gift deeds as not to be genuine. In the case of Bib! Kaniz Zainab v. Mobarik Hussain (1924 Pat. 284), it has been held that practice of the Court itself acting as an expert and pronouncing a document to be forgery is deprecated. Similar view was taken in the case of Azmatullah v. M. Siam Lal ((1947 All. 411). It was held that opinion of the Court itself untrained in medicine and without trained assistance on questions of medicine is valueless. On questions of handwriting also the practice of the Court itself acting as an expert is disapproved. In Muhammad Ziaullah Khan v. Rafiq Muhammad Khan (1939 Mad. 213) and Sadiqa Begum v. Attaullah (1933 Lah. 885) an authoritative pronouncement was given holding that the evidence of an expert in handwriting is of little value when it is contradicted by that of another. In Ghulam Abbas v. State (1976 P Cr. L J 918) opinion of a handwriting expert has held not to be a final word on the subject. In view of various judicial pronouncements, we are of the viehat opinion of F.I.A. handwriting expert having been contradicted by another was of insignificant value. The Assessing Officer erred in giving his own judgment, by adopting the role of handwriting expert. Both the hand writing experts were subjected to cross‑examination by the Assessing Office and the accountable persons. F. I. A. handwriting expert relied by the Assessing Officer was unqualified and had learned by experience whereas the other one was qualified. Opinion of the qualified expert being more exhaustive and logical merited acceptance. Assessing Officer did not assign any reason for concurring with the opinion of F. I. A. expert. In the absence of any reasoning in support of his findings, the view adopted by the Assessing Officer being baseless is erroneous. There being contradictory reports of two handwriting experts, we refuse to assign any weight to their evidence. The findings of the Assessing Officer given on the basis of evidence of handwriting expert stands vitiated. Stamp‑vendor's evidence.‑The Assessing Officer erroneously discarded the stamp‑vendor's evidence. If an enquiry was pending against the stamp vendor in some other case, that had no relevancy to the genuineness of the stamp papers sold by him to the deceased. For establishing genuineness, statement of the stamp‑vendor admitting sale of stamp‑papers to the deceased was enough. The Assessing Officer just tried to twist the matter by giving undue importance to different serial numbers of the stamp‑papers used in the gift deeds. When the stamp‑vendor had categorically admitted that stamp‑papers used in execution of gift deeds were sold and signed by him on 3‑7‑1977 and the deceased had purchased more than three stamp‑papers on the same date, the fact that the stamp‑papers used in execution of gift deeds did not contain consecutive serial numbers was totally irrelevant. The deceased who had purchased more than three stamp‑papers may have utilized the other papers of execution for some other documents. There was no obligation on the part of the deceased under any provision of law to execute gift deeds on the stamp‑papers bearing consecutive serial numbers. This was just a vague objection. The stamp‑vendor having admitted sale of stamp‑papers used in execution of gift. deeds at one and the same time, his statement had full evidential value and the Assessing Officer discarded his evidence on erroneous and extraneous considerations. We cannot appreciate the other reason assigned by the Assessing Officer for discarding the stampmndor's evidence. After purchase of stamp‑papers on 3‑7‑1977, the deceased donor while executing gift deeds on 29‑8‑1977 neither committed any illegality nor any irregularity. Under the Stamp Act, stamp‑papers were valid for a period of six months after the date of purchase. The purchaser, thus was at liberty to execute gift deeds at any time during this period. In any way, gap in the date of execution of deeds and purchase of stamp‑papers had no relevancy and had nothing to do with the evidence of the stamp‑vendor. There being no inquiry pending against the stamp‑vendor regarding stamp papers sold to the deceased, the Assessing Officer erred in discarding his statement. The assumption of the Assessing Officer that stamp‑papers were purchased on a subsequent date is nothing short of imagination. After going through the statement of the stamp vendor recorded by the Assessing Officer behind the back of the accountable persons we do not find any defect calling for discarding his evidence. We do not know that wherefrom and on what basis, the Assessing Officer thought of this assumption. Stamp vendor's evidence had to be accepted, he having admitted sale of stamp papers to tile deceased. We modify the impugned order on this issue and relying on the statement of the stamp‑vendor, accept his evidence. The result will be that the stamp papers used by the deceased donor in execution of gift deeds were genuine. Evidence of the witnesses.‑All the three gift memorandums were witnessed by two persons. One of them Mr. Muhammad Akram appeared before the Assessing Officer and stated that the deceased had signed on the gift deeds in his presence. Affidavit of other witness namely ; Ch. Muhammad Amin deposing that the deceased had signed the gift deeds in his presence was also produced. In addition to that, all the three donees filed their own affidavits to the similar effect. The Assessing Officer, stated that evidence of these persons was not acceptable as they were either employees or beneficiaries of the gifts. The Assessing Officer again erred in discarding evidence of the witness on irrelevant considerations. Under Muhammadan Law for the purpose of gift verbal declaration showing the intention of tile donor is sufficient. In the instant case, the Assessing Officer has not taken any objection to the gifts made verbally by the deceased donor on 29‑8‑1977. The result thus will be that the verbal gifts made by the deceased hold good in the eye of law. Execution of gift deeds was a covering umbrella. The documents of gift deeds were not required by law to be attested. Under section 72 of the Evidence Act, such document was admissible in evidence even as an unattested document. Under section 47 of the Evidence Act, signatures of the deceased on gift deeds could be proved by a person who had seen the document being written. Mr. Muhammad Akram, had categorically stated that he had seen the deceased signing the gift deeds. His statement was fully relevant for establishing genuineness of the document. The Assessing Officer brushed aside this piece of evidence on irrelevant considerations. The fact that the witness was employee of the deceased did not render his statement as to be inadmissible. Only that person had to sign as a witness who was present on the spot at the time of execution of gift deeds. In the statement and in the cross‑examination of this witness there is nothing to establish any doubt regarding integrity of the witness for discarding his testimoney. The Assessing Officer also fell in error in brushing aside affidavit of second witness i.e. Ch. Muhammad Amin. Affidavit of this witness was to the effect that the deceased had signed the gift deeds in his presence. Similarly, the donees had filed their affidavits to the same effect. The Assessing Officer mildly observed that it would be difficult not to accept these affidavits but later on discarded all the four affidavits on flimsy ground. If the affidavits of the donees and Ch. Muhammad Amin, were not acceptable to the Assessing Officer on one pretext or other, he should have either discarded the same on some solid reasons or the deponents should have been summoned for statement and cross‑examination. In the absence of any such action, the depositions made on oath have been erroneously discarded. Another aspect of the matter is that the donees had also signed the gift deeds in token of acceptance of gifts. The Assessing Officer erred in not accepting their deposition as evidence of gift. The fact that the donees were the beneficiaries of the gift does not affect the testimony made in the affidavits. Lastly, we find that all the three gift deeds were attested by an Advocate. This attestation seems to have been made in the capacity of a Notary Public, Very strangely the Assessing Officer did not bother to take any notice of this attestation. The impugned order is silent on this aspect. The attestation having not at all, been attacked by the Assessing Officer, it will have to be .accepted as genuine. The gift deeds having been signed and attested by a Notary Public, there remains no doubt regarding genuineness of the documents. On the basis of above discussion, we discard the findings of the Assessing Officer regarding the evidence produced in support of genuineness of signatures of the deceased on the gift deeds. We hold that the gift deeds containing genuine signatures of the deceased, are valid. The last objection of the Assessing Officer was that though the deceased was alive for 16 days after execution of gift deeds, yet he failed to avail the benefit of 10 % rebate of payment of gift tax within 15 days of the making of gifts. On this basis, the Assessing Officer again doubted the genuineness of the gifts. The deceased had signed gift tax return on 29‑8‑1977. Since the deceased used to submit his income‑tax returns on 15th of July, each year on the basis of period ending 31st December, of the earlier year, the gift tax return for the assessment year 1978‑79 could have been filed till 15‑7‑1979. The law did not bestow any legal compulsory requirement on the deceased to file gift‑tax return immediately after execution of the gift deeds. The deceased completed and signed the return but opted to wait for submission of return at the prescribed time. The deceased could never foresee his death. Provisions of section 18 of the Gift Tax Act regarding allowance of rebate of 10 % in case of payment of entire amount of gift‑tax within 15 days of the making of gift was not at all, a mandatory provision. This provision simply induced the donors for prompt payment of entire demand. The deceased was not compulsorily required to avail this inducement. The Assessing Officer drew erroneous inference against the deceased on this issue. There is no provision in the Gift Tax Act which necessitates the payment of admitted liability of gift‑tax either immediately after execution of gift deeds or even during lifetime of the donor. On the contrary, in the Gift Tax Act unlike the Income‑tax Act, there is no provision of law which would have ordained the deceased for payment of the admitted liability of gift tax even at the time of filing of return. Gift tar had to be paid on creation of actuall demand after framing of assessment. In the instant case, the accountable persons had paid gift‑tax of Rs. 7,57,180 on 15‑7‑1978 at the time of filings of return and much before the completion of Estate Duty Assessment. As a result of the above discussion, the findings of the Assessing Officer on the issues of gifts are modified holding that the gifts of compensation bonds made by the deceased were genuine and not covered by provisions of sections 8 and 9 of the Estate Duty Act. Amount of compensation bonds at Rs. 30,95,000 is excluded from the estate of the deceased. In the result the impugned order is modified and the appeal filed by the accountable persons succeeds in the manner and to the extent indicated above. Appeal accepted accordingly.