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Issues:
Whether the value of a residential property gifted by a deceased to his wife should be included in the principal value of the estate for estate duty calculation under the Estate Duty Act, 1953. Analysis: The case involved a deceased, B. Rudra alias Rudrashetty, who had gifted a residential property named "Rajatadri" to his wife more than two years before his death. The estate duty authorities sought to include the value of the gifted house in the calculation of the principal value of the deceased's estate, arguing that the wife-donee did not retain possession and enjoyment of the property to the entire exclusion of the deceased-donor. The accountable person appealed to the Appellate Controller of Estate Duty and later to the Tribunal, but both appeals were unsuccessful, leading to the reference of the question to the High Court. The Tribunal's decision was based on the deceased continuing to reside in the gifted house until his death. The High Court examined previous judgments, including those of the Supreme Court and various High Courts, regarding similar situations where a husband gifts a residential property to his wife. The High Court noted that the mere fact of the husband's continued residence in the gifted house does not imply that the wife-donee did not retain exclusive possession and enjoyment. The Court cited decisions from the High Courts of Calcutta, Andhra Pradesh, and Madras supporting this view. The High Court emphasized that the presence of the deceased in the matrimonial house after the gift to his wife does not negate the wife's exclusive possession and enjoyment of the property. The Court disagreed with the view of the Allahabad High Court and instead aligned with the decisions of other High Courts, including Calcutta and Madras. Ultimately, the High Court held that the value of the house gifted to the wife should not be included in the calculation of the principal value of the deceased's estate for estate duty purposes. The question was answered in the negative, in favor of the accountable person, with no costs awarded.
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