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TMI Blog1971 (12) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by A. D. V. REDDY J.- Among the numerous and variety of private and publics trust created by late Nawab Mir Sir Osman Ali Khan Bahadur, the ex-Nizam of Hyderabad, was one named " The H. E. H. the Nizam's Family Pocket Money Trust " meant to provide for certain expenses of his wives, children, grand-children, etc. whereunder 55 lakhs of rupees in the shape of Government securities were settled as trust to be divided notionally into 50 equal units, out of which groups of units were allocated to different members of the family regarding which provisions were made in the trust deed, dated December 29, 1950. We are now concerned with 20 such units which were allotted for the benefit of one Amina Marzia, second daughter of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Amina had died intestate, etc......... " The rest of the provisions relate to the devolution of the properties in case of certain contingencies with which we are not now concerned as they are not relevant for our purpose. On the death of Dulhan Pasha Begum, wife of the settlor, on February 15, 1955, the Deputy Controller of Estate Duty subjected the twenty (20) units of the entire trust money with the accumulated income thereon totalling up to Rs. 2,10,807, to estate duty, on the ground that the entire estate passed to the accountable persons, viz., the trustees. On appeal, the Appellate Controller of Estate Duty confirmed the same, and on further appeal to the Appellate Tribunal, it held that no property passed on the death of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evolving on the death of a person ". But, the " passing of property " is not limited to devolution on the death of a person to whom the property belongs. It may also pass on the death of a party to whom the property does not belong as is indicated in section 34(3) of the Estate Duty Act. In Attorney-General v. Milne Lord Parker of Waddington stated that it denotes some actual change in the title or possession of the property as a whole which takes place at the death. Later, Viscount Haldane L. C. in Neville v. Inland Revenue Commissioners stated that the word " passes " may be taken as meaning " changes hands ". Subsequently, in Scott v. Inland Revenue Commissioners Lord Russell of Killowen held that in order to constitute a passing of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was settled by the deceased person upon trust to apply the capital and the income for his children then living and thereafter to be born as the settlor would appoint and subject thereto, the income was to be accumulated and on the settlor's death, the trust funds and accumulations were to be held for the settlor's children living at his death, as he should appoint, and in default 2/5 ths should go to his elder son and 3/5ths to his other children living on his death and if no children surviving, there was to be a gift-over to the settlor's next of kin at his death and the settlor died without making any further provisions, leaving a son and three daughters, the question arose whether the trust funds and accumulations passed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... died and there was no issue of the marriage, the Crown claimed estate duty on the trust funds on the husband's death on the ground that the interest extending to the whole income had now passed to the wife, Russell L.J., while distinguishing the cases of Scott and Burrell, stated that while in those cases there is a passing of property on them and a new trust began, in the case dealt with by them the same trust had continued, that it was a discretionary trust, the purpose of which was and continued to be to provide for the support of such of the parties to the marriage and their issue as should be from time to time living. The present case is a simple one, where the beneficiary under the trust is one Amina Marzia and her heirs, and the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en after, her beneficial interest in the income had continued. The beneficial interest had become vested in her the moment the trust came into existence and the beneficial interest was not affected by the death of Dulhan Pasha Begum. Therefore, there was no passing of property on the death of Dulhan Pasha Begum. The Tribunal was, therefore, right in holding that the death had effected no change in the rights and interests which the beneficiary had and therefore no property has passed and no duty can be levied under section 5 of the Estate Duty Act on the property. The question referred to us is, therefore, answered in the negative and in favour of the assessee. The assessee will get the costs from the department. Advocate's fee Rs. 250. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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