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TMI Blog1968 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ans or by the remotest suggestion a deed of gift by the husband to the wife. This is a document of sale where the vendor, Henry Earnest Cecil Grant of Asansol, was selling this property to Begum Shamsun Nehar Mansur. This deed of sale recites the consideration to be Rs. 20,000. It also states clearly that the whole of this money or consideration of Rs. 20,000 was paid " with her own money and for her own benefit and enjoyment ". The husband, Abul Mansur, had nothing to do with this document, either its purchase or its execution or as an attesting witness or even as any confirming or other party to this deed. The whole question or controversy in this case is, did this property form part of the estate of the deceased, Abul Mansur, the husband, or the wife. Abul Mansur, the husband, died on the 11th April, 1959, that is, a period of twelve years after this conveyance. The accountable person in these proceedings was his wife, Mrs. Shamsun Nehar Mansur, widow of Abul Mansur. Looking at this deed of conveyance, the only material document for this purpose, one should have thought that the simple answer to the question asked would be in the negative because such a property could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwelling house. There is no beneficial interest in the title deed itself. The husband had no interest direct or indirect, of any kind so far as the deed of conveyance is concerned. It reserved no "benefit" "by contract or otherwise" within the meaning of section 10 of the Estate Duty Act. The Board perhaps realised the unsatisfactory position regarding these facts. The present appellant who appealed to the Board on this point did not succeed. By its order dated November 26, 1960, the Board decided as follows: "The only contention is against the inclusion and valuation of house property No. 33, Apcar Garden, Asansol, valued at Rs. 40,000 by the Assistant Controller. This property was purchased on February 21, 1947, for Rs. 20,000 in the name of the deceased's wife with funds provided by the deceased. The deceased was living in this property all the time since its purchase till the date of death. Even if the property was not benami purchase of the deceased and belonged to the wife as a result of the gift by the deceased, section 10 would be applicable inasmuch as the donor was not entirely excluded from possession and enjoyment of the property till the date of the death. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding for which this fact is so material. To hold a document really to be a benami, for that is the purpose of this contention that the money was provided by the husband, legal evidence is required. It was pointed out by the Andhra Pradesh High Court in Smt. Shanta Bai Jadhav v. Controller of Estate Duty that: "... even if the purchase money had come from the husband, it did not follow that the beneficial interest in the property vested in the deceased; at any rate, so long as the title deed stood in the name of the wife, it was not competent for the deceased to dispose of the property and under section 6 of the Estate Duty Act such property cannot, therefore, be deemed to pass on his death, and estate duty was not leviable on the value of such property." Because the Board in its appellate order was not sure of the fact that the husband provided the funds to the wife to purchase the property, that is perhaps the reason why the appellate order went on to consider the case under section 10 of the Estate Duty Act after observing that " even if the property was not benami purchase of the deceased and belonged to the wife as a result of the gift by the deceased". We, therefore, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct or otherwise" in the second limb of the section will not control the words "to the exclusion of the donor" in the first limb. The first limb may be infringed if the donor occupies or enjoys the property or income even though he has no right to do so which he could legally enforce against the donee. In other words, in order to attract the section, it is not necessary that the possession and enjoyment of the gift must be referable to some contractual or other enjoyment enforceable in law or in equity. Even if the donor is content to rely upon the mere filial affection of his sons with a view to enable him to continue to reside in the house which he has given to them, it cannot be said that he was " entirely excluded from possession and enjoyment " within the meaning of the first limb of the section and, therefore, the property will be deemed to have passed on the death of the donor and will be subject to levy of estate duty. The Supreme Court construed the word " otherwise " ejusdem generis and held that it must be interpreted to mean some kind of legal obligation or some transaction enforceable at law or in equity which though not in the form of a contract may confer a benefit on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract or otherwise. We shall avoid using the word "limb" in case it creates any confusion. That is the main structure of this section. The idea is plain. First, the bona fide possession and enjoyment must be immediately assumed by the donee; the second is that the retention of the possession and enjoyment of the property must be to the entire exclusion of the donor or of any benefit to him by contract or otherwise. But the significant point for decision in the present reference before us is, does this involve or affect the marital right of a husband for coverture and consortium with the wife only on the ground that the husband had made a gift to his wife of a house where she lives ? The plain contention of the counsel for the revenue is that once a husband has made a gift of a house to his wife, he cannot go to that house any more for any purpose. We feel it a little difficult to accept such an unqualified submission. The language and the words of section 10 of the Estate Duty Act quoted above indicate that it is the possession and enjoyment of the property which are the target. If they are not immediately assumed by the donee and if the donor is not entirely excluded from them, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the time being representing the proceeds of sale and also includes any property converted from one species into another by any method." The foundation of this argument is that the money was the husband's and the husband's money has been converted into this house. This argument really is no longer available to Mr. Pal for the revenue on the ground that we have held that there is no legal evidence or material to support that the husband advanced his money. But even assuming that it is so, Mr. Pal for the revenue contends that this means that the property could be converted from one species into another even by the donee after the gift is made. We are unable to accept this interpretation without any qualification. What is being defined in section 2(15) of the Estate Duty Act is the property of the deceased. Change of title or ownership cannot be covered by this extended meaning of conversion in section 2(15) of the Estate Duty Act. The conversion intended under section 2(15) of the Act is conversion by the donor or the deceased himself during his lifetime or by such well-known processes as by the courts during the process of administration by executors or administrators or ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and conclusive in connection with all matters relating to its conduct, that the capital of the business should consist of the livestock and plant then owned by the respective partners, that the business should be conducted with the respective holdings of the partners and such holdings should be used for the purposes of partnership only, that all lands held by any of the partners on the date of the agreement should remain the sole property of such partner and not on any consideration be taken into account as or deemed to be an asset of the partnership and any such partner should have the sole and free right to deal with it as he might think fit. Now each of the three partners owned a property, that of the donee son being that property which had been given to him by his father and each partner brought into the partnership livestock and plant and their three properties were thenceforth used for the depasturing of the partnership stock. This continued till the death of the father. It was held by the Privy Council that on those facts the value of the property given to the son was to be included in computing the value of the father's estate for the purposes of death duty on the strengt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husband and wife. Viscount Simonds at page 97 of the tax report in Clifford John Chick v. Commissioner of Stamp Duties noticed the decision in St. Aubyn v. Attorney-General, and after doing so observed : "But the question may arise and, having arisen, may lead to a difference of opinion as to what is the subject-matter of the gift." What is the subject-matter of the gift is certainly a very important and crucial question. The house and the wife both or the one and not the other. Viscount Simonds at page 98 of that report negatived the argument put forward on the basis of commercial transaction and for full consideration and observed : " Their Lordships see no reason why a gloss should be put upon the plain words of the sub-section by excluding from its operation such transactions " : see also the further observations of Viscount Simonds at pages 99 and 100. The Supreme Court in George Da Costa's case at page 502 stated as follows : " It was observed by Hamilton J. that there was no legally enforceable arrangement permitting the deceased to reside in the house and the deceased was simply the guest of the donee and was fully content to rely upon the affection which the donee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate duty was not payable." It was also decided by the court that: " The words 'or otherwise' in the sentence 'or of any benefit to him by contract or otherwise' must be read as meaning some arrangement ejusdem generis with contract, that is to say, an enforceable arrangement. " Lastly, this case is different from the case decided by the Supreme Court in George Da Costa v. Controller of Estate Duty on one more significant point. All these cases which we have been considering were cases where there was some kind of previous right, possessory or otherwise, of the donor in respect of the property gifted. In Da Costa's case, for instance, the property had already been purchased by the father both in his name and in the wife's name and the parents ultimately making gift of the house to the sons. Again, in Attorney-General v. Seccombe's case the grand-uncle was formerly living in the very house which he made a gift of to his grand-nephew. Also in Clifford John Chick's case, the father was making a gift of the house where he had possessory and legal rights to his son before he made a gift of it. It is in such a context, a meaning has to be given to the expression, " entire exclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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