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TMI Blog1971 (3) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10 of the Act ? Mohd. Obedulla Khan died on March 7, 1958. On his death his widow, Bibi Ahmadi Begum, as the accountable person under section 53 of the Act, filed an account of the properties comprised in the estate of the deceased. The net value of the estate was assessed at Rs. 40,025. The Assistant Controller of Estate Duty, Meerut, determined the principal value of the estate passing on the death of the deceased at Rs. 7,99,474 and the estate duty payable thereon at Rs. 1,11,144.80. Among other properties it included the value of a haveli in village Udaipur Kalan at Rs. one lakh. He found that the property had been gifted by the deceased to the accountable person in 1918, but the deceased continued to live there till the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstance that he is the husband of the donee. It is urged that the continued residence of the donor is referable not to any proprietary right in the property but merely to the relationship of husband and wife between the donor and the donee. Section 10 of the Act, as it stood at the relevant time, provided : " 10. Gifts whenever made where donor not entirely excluded.- 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in George Da Costa v. Controller of Estate Duty has, while preferring the view taken in Chick case, pointed out that the second part of section 10 has two limbs : the deceased must be entirely excluded (i) from the property, avid (ii) from any benefit of contract or otherwise. After examining the case law on the point it observed : " It appears from all these cases that the first limb of the section may be infringed if the donor occupies or enjoys the property or its income, even though he has no right to do so which he could legally, enforce against the donee. ' Where the question is whether the donor has been entirely excluded from the subject-matter of the gift, that is the single fact to he determined. If he has not been so excluded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the wife after the gift was made he did so not by virtue of any proprietary right in the property but by reason of the relationship existing between them. Construing section 10, it was observed : " 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 sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gift. All that happens is that if he continues to reside in the house, the house becomes liable to inclusion in his estate after his death for the purposes of estate duty. If " the eye need look no further " than to see whether the donor has been excluded from the subject-matter of the gift, the nature of the relationship between the donor and the donee, be it husband and wife or father and son, can make no difference. It seems to us that the principle laid down in George Da Costa extends to all cases and is not limited by reference to the peculiar personal relationship between the donor and the donee. Whether the continued residence of the donor in the property was in the exercise of a proprietary right or because of a personal relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to pass on the donor's death by reason only of the residence therein of the donor except where a right of residence therein is reserved or secured directly or indirectly to the donor under the relevant disposition or under any collateral disposition. " This amendment was made effective from April 1, 1965, and operates prospectively. The next contention on behalf of the accountable person is that section 10 cannot be invoked because the property was subsequently transferred by the donee under a wakf-ul-aulad. It seems to us that the subsequent transfer of the property can make no difference to the application of section 10. On the plain language of that section what is relevant is that the donor has not been excluded entirely from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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