9911796707
TMI Blog1968 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... avaraju Ranga Raju who died on 7th April, 1956, leaving his two sons who are accountable persons in this case. These accountable persons furnished an account of the property passing on the death of the deceased in which 408 acres, 71 cents of agricultural land, which was the subject-matter of the settlement deeds executed on 29th May, 1955, and 30th May, 1955, in favour of his wife, three sons and two grandsons was claimed to be not the property of the deceased on the date of his death. The Assistant Controller of Estate Duty, however, found that the right of possession and enjoyment of the said agricultural land was conferred on the wife, three sons and two grandsons in 1953. The deceased had delivered possession of another 136.82 acres of agricultural land to his first son in 1953, but had not executed any deed of settlement in respect of it. In respect of 408.71 acres of agricultural land, however, though the deeds of settlement were executed, as stated above, those deeds, it may be noticed, were within two years prior to the date of death of the deceased. The value of 408.71 acres of land and of 136.82 acres of land were determined for purposes of the estate duty assessment, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 10 : Section 9 : " (1) Property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust, settlement upon persons in succession or otherwise, which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death : Provided that in the case of gifts made for public charitable purposes the period shall be six months. (2) The provisions of sub-section (1) shall not apply to gifts made in consideration of marriage or which are proved to the satisfaction of the Controller to have been part of the normal expenditure of the deceased, but not exceeding rupees five thousand in the aggregate. " Section 10 : " Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise : Provided that the property shall not be deemed to pass by reason only that it was not, as from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trustee. In both the cases, the requirement of law is that it must be effected by a registered instrument and, unless this is done, the title still vests in him and under section 6 of the Estate Duty Act, he is in law deemed to have the disposing power of the property and therefore that property passes on his death. To our minds, these propositions admit of no doubt and are well established. Even where a gift or disposition of property has taken effect under law and the donor has divested himself of his ownership and title therein, the Estate Duty Act has considered even those properties to be part of the estate of the deceased, if it is established that he was still enjoying the benefit thereof on the date of his death, i.e., if it is shown that the donee was not bona fide completely in possession and enjoyment of the property taken under a gift, immediately after the gift was made, that property is deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. This is an exception to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered that case as not covering the question which they had to decide. The question posed was, after what the deceased did, what beneficial interest remained in him. " The answer ", Jenkins L.J. observes at page 518 " can only be, in my view, that he had no beneficial interest left whatever ; his only remaining interest consisted in the fact that his name still stood on the register as holder of the shares, but, having parted in fact with the whole of his beneficial interest, he could not, in my view, assert any beneficial title by virtue of his position as registered holder. In other words, in my view, the effect of these transactions, having regard to the form and the operation of the transfers, the nature of the property transferred, and the necessity for registration in order to perfect the legal title, coupled with the discretionary power on the part of the directors to withhold registration, must be that, pending registration, the deceased was in the position of a trustee of the legal title in the shares for the transferees". It must be noticed that the transfers were effected under seal, as formal documents. In English law documents executed under seat and ordinary documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which related to an endowment of immovable property by a Hindu to a deity, it was held by the Allahabad High Court that no deed or instrument is necessary. Except some of those transfers and dispositions which are permitted under the personal laws, all other transfers and dispositions must take effect, in so far as the immovable property the value of which is Rs. 100 or more is concerned, only by a registered instrument. In so far as the alleged gift of 136.82 acres, the subject matter of the second question is concerned, there is not even an instrument purporting to make a gift in favour of the donee. In so far as the first question is concerned, no doubt, a settlement deed was executed under a registered instrument and, in spite of the recitals that possession had been given earlier in 1953, the gift could only be deemed to have taken place on the date when the registered instrument was executed. In fact, the registered instrument recites that further action will be taken to have the mutation in the names of the donees after the deed was executed. Having regard to what has been observed above, our answers to the first and second questions are in the affirmative and in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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