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Issues Involved:
1. Inclusion of Rs. 22,630 in the estate of the deceased under section 46(2) of the Estate Duty Act. 2. Inclusion of properties under section 10 of the Estate Duty Act: - N.G.P. notes of the value of Rs. 21,249. - House property No. 85, Nallagunta. - House properties Nos. 1234, 1235, and 1238 at Pioneer Bazar, Bolarum. Detailed Analysis: Issue 1: Inclusion of Rs. 22,630 in the Estate of the Deceased under Section 46(2) of the Estate Duty Act The Central Board of Direct Taxes referred the question of whether Rs. 22,630 was correctly included in the estate of the deceased under section 46(2) of the Act. The accountable person, the widow of the deceased, argued that the cash belonged to her and not to the deceased. However, the Assistant Controller found that the deceased had withdrawn significant amounts from his accounts, which were found in the iron safe. The Board concluded that the amount withdrawn by the applicant during the two years prior to the death of the deceased should be treated as part of the estate under section 46(2) of the Act. This section extends the principle of section 46(1) and includes any debt satisfied or discharged within two years prior to death as part of the estate. Thus, the sum of Rs. 22,630 was correctly included in the estate, and the first question was answered in the affirmative and against the assessee. Issue 2: Inclusion of Properties under Section 10 of the Estate Duty Act (a) N.G.P. Notes of the Value of Rs. 21,249 The Assistant Controller and the appellate authority found that the deceased was not entirely excluded from the benefit or enjoyment of the N.G.P. notes. The income from these notes was received by the deceased and merged with his business funds. There was no effective transfer of the notes to the wife until 1955, and no evidence showed that she enjoyed the interest from them. Therefore, the N.G.P. notes were correctly included in the estate under section 10 of the Act. (b) House Property No. 85, Nallagunta This house was constructed by the deceased in the name of his wife, and he lived in it until his death. The accountable person argued that the deceased living in the house did not amount to deriving a benefit from it. The court referred to a similar case where it was held that a husband living with his wife in a house gifted to her does not constitute a benefit under section 10 of the Act. The court concluded that the property was not includible in the estate of the deceased under section 10, answering this part of the question in the negative and in favor of the assessee. (c) House Properties Nos. 1234, 1235, and 1238 at Pioneer Bazar, Bolarum The Assistant Controller and the appellate authority found that the deceased received rental income from these properties, which was used in his business. The deceased was not entirely excluded from possession and enjoyment of these properties. Thus, these properties were correctly included in the estate under section 10 of the Act, answering this part of the question in the affirmative and against the assessee. Conclusion - Question 1: Affirmative and against the assessee. - Question 2: - House Property No. 85, Nallagunta: Negative and in favor of the assessee. - N.G.P. Notes and House Properties at Pioneer Bazar, Bolarum: Affirmative and against the assessee. No order as to costs was made in this reference.
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