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TMI Blog1992 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... he domicile of Bahrain and settle down in Bahrain permanently. It was also stated that the change of domicile was also prompted by reason of her terminal illness and the medical practice she had established. The claim of the Accountable Person was rejected by the learned Assistant Controller of Estate Duty vide para 2 of his order observing as under :-- " The deceased was an Indian Passport holder and a citizen of India. Her husband and children are living in India. She has not acquired any immovable property outside India. The only evidence produced by the Accountable Person is a letter written by the deceased before her death. In this connection it is to be stated "that even a declaration in a Will has no conclusive value and that the matter has to be determined on the basis of the place of permanent residence. This observation is made by the Madras High Court in the case of CED v. Ida Bells Scuddar [1980] 123 ITR 104. " Discussing the point in detail, the learned Assessing Officer came to the conclusion that by virtue of sections 15 and 16 of the Indian Succession Act, the deceased cannot have any domicle other than the domicile of her husband. The claim of exemption with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 8D of the Estate Duty Rules says that the bank accounts located in India are considered to be in India still the NRE Account Rules framed by the Government makes it abundantly clear that so long as the deceased lived in Bahrain, these accounts are freely transferable. Though the NRE Account is located in India, interest accrued thereto is not included as income in India. For the purposes of wealth, the same is excluded. Therefore, for Estate Duty purposes alone the NRE Account cannot be treated as taxable in India. Being a resident of Bahrain from 1-1-1972 till her death on 16-10-1981, the deceased continued the medical practice by virtue of work permit which was renewed from year to year. 4. The first appellate authority held that in spite of the fact that her husband was an Indian domicile, the deceased acquired a domicile of Bahrain by choice. Just as in the case relied upon by the Assessing Officer - Dr. Ida Bella Scuddar's case in the instant case also, the deceased had no idea of going back to the country of her origin. The letter dated 16-9-1979 written by the deceased from Bahrain to her husband makes it clear that by choice she has acquired the domicile of Bahrain wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Bahrain dated 16-9-1979. The Licence No. 41 issued by the Ministry of Health, Bahrain, is dated 1-1-1972 which is valid for one year. The last renewal of licence is valid up to 31-12-1981. However, the licence holder expired in London on 16-10-1981. 6. The learned Senior Departmental Representative vehemently contended that a vital point was not considered by the learned first appellate authority in the proper perspective. Section 15 of the Indian Succession Act deals with "domicile acquired by a woman on her marriage " and section 16 deals with "wife's domicile during marriage". These relevant sections are reproduced below : " 15. Domicile acquired by woman on marriage.----By marriage a woman acquires the domicile of her husband, if she had not the same domicile before. 16. Wife's domicile during marriage.----A wife's domicile during her marriage follows the domicile of her husband. Exception: The wife's domicile no longer follows that of her husband if they are separated by the sentence of a competent Court, or if the husband is undergoing a sentence of transportation. " He further contended that the deceased was not a divorcee nor was judicially separated. She has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not important in deciding the question of domicile. The Income-tax Act does not differentiate the mode of acquisition and there is no restriction put by the Act for the acquisition of properties by a non-resident in India. Under Foreign Exchange Regulation Act a permission is required for acquisition of properties. The domicile by choice cannot be super-imposed by any external power. He relied upon the decision of the Madras High Court in the case of Dr. Ida Bella Scuddar. 9. We have heard both parties and perused the documents produced before us. Under the Indian Succession Act, 1925 (Act XXXIX of 1925) section 4 specifies the persons to whom the Act is not applicable, i.e., a Hindu, Muhammadan, Buddhist, Sikh or Jaina. Section 5 regulates succession to deceased person's immovable and movable property. This section applies to the immovable property in India of a deceased person. Wherever such person may have had his domicile at the time of death, the succession to such properties shall be regulated by the law of India. Succession to the movable property of a deceased person shall be regulated by virtue of section 5(2) by the law of the country in which such person had the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order of the first appellate authority, we would like to discuss the case of Dr. Ida Bella Scuddar relied on by the Accountable Person. This was a case where a noble American lady left her country of origin and came to India to serve the suffering masses. The pamphlet which fired the imagination of this noble lady "The claims of six hundred millions" once and for ever fixed her mind and body in India serving the suffering masses especially the neglected womanfold. Except going back to America in furtherance of the advancement of the institution which she started, she never went back to United States, the domicile of her origin. She had no attachment to her country of origin. Her family was the teaming millions of India. A perusal of the judgment of the Hon'ble Madras High Court will make it clear that as their Lordships observed in page 114 "there could have been no sentimental attachment to one like her who dedicated herself to the missionary activities, to go to a country with which her connections were only tenuous. Originally she appeared to have an idea of marrying and quietly settling down in life. But that was abandoned at a very early age when, after her studies she c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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