9911796707
|
Home
Issues: Estate Duty Act - Inclusion of gifts of immovable property in deceased's estate; Application of sections 10 and 12; Reservation of interest in property settled; Exclusion of donor from benefit; Valuation of benefit for duty assessment.
Analysis: The judgment pertains to a reference under the Estate Duty Act concerning the inclusion of gifts of immovable property in the deceased person's estate. The deceased made six gifts to his sons, grandsons, daughter, and wife, totaling Rs. 7,38,656. The revenue contended that the reservation towards maintenance in the gifts attracted sections 12 or 10 of the Act. The primary issue was whether the properties settled by the deceased were liable for inclusion in his estate as property deemed to pass on his death. The court analyzed the gift deeds executed by the deceased and found that they were all made more than two years before his death. The disposition of the immovable property in favor of sons and grandsons was of absolute ownership, with provisions for payment of annual sums for expenses. The court determined that these provisions did not create any interest in the property settled, thus ruling out the application of section 12. Regarding the application of section 10, the court examined whether there was an exclusion of the donor from any benefit by contract. It was established that the provision for maintenance in the deeds amounted to a contract supported by consideration. The court opined that such a benefit reserved for the donor would attract duty as property passing on the deceased's death, albeit only to the extent of the benefit. The valuation of the benefit for duty assessment was discussed, with the court emphasizing that the value would be calculated based on the maintenance amounts multiplied by the years of the donor's existence. For the deed in favor of the daughter, where no sum was fixed as maintenance, it was left to be determined by the accountable person. The judgment clarified that section 10 did not allow for the entire value of the property to be considered as passed, emphasizing that only the extent of non-exclusion of benefit would be subject to duty. In conclusion, the court ruled in favor of the accountable persons, indicating that the provision for maintenance in the deeds constituted a benefit attracting duty, but only to the extent of the benefit. The judgment highlighted the importance of assessing and valuing the benefit for duty computation, ultimately providing clarity on the application of sections 10 and 12 in the context of the Estate Duty Act.
|
