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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 ..... value of the haveli was correctly included in the principal value of the estate of the deceased, as the value of property deemed to pass on his death under section 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. on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first contention is that property taken under a gift cannot be deemed to pass on the donor's death where the donor continues in possession merely by reason of the 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 thenceforwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be deemed to pass even where the donor possessed or enjoyed it without any legally enforceable right to sustain him. So far as we are concerned, the Supreme Court 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 qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of estate duty. The learned judges in that case were impressed by the consideration that when the husband continued to occupy or enjoy the property along with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted by them. The only question is whether the property gifted attracts estate duty. If the husband gifts the house to his wife he does not lose the wife by reason of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further proviso in section 10 : " Provided further that a house or part thereof taken under any gift made to the spouse, son, daughter, brother or sister, shall not be deemed 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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