9911796707
TMI Blog1971 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... a son, O. S. Chawla, and a wife, Sushila Chawla. For the purposes of assessment of estate duty the son is the accountable person. He filed an account of the property passing on the death of his father. The list of property did not include shares of the value of Rs. 77,238. The names of the companies which had issued the shares are not disclosed in the statement of the case. But, that is of no moment. It should, however, be noted that the share scrips were in the name of Sushila Chawla, the wife. The Assistant Controller of Estate Duty included the value of the shares in the principal value of the estate of the deceased. His order was affirmed on appeal by the Appellate Tribunal. Under section 64(1) of the Estate Duty Act (hereinafter calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of the deceased. She was the benamidar of the deceased. We have to answer the question referred to the court on the basis of this legal position. What is the nature of a benami transaction? The person who is the benamidar has nominal title to the property ; the person who purchases the property in the name of the benamidar has the real title to the property. The law imposes an obligation in the nature of trust on the benamidar (see the Trusts Act, section 82) : He is a constructive trustee. He holds the property for the benefit of the person who has the real title to it (see Gopeekrist Gosain v. Gungapersaud Gosain ). When a transaction of purchase is proved to be benami, courts give effect to the real title, and not to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to pass. An attempt is made to inject vitality in the argument with the aid of section 6. But, in our view, section 6 will not apply to the case. Section 6 provides that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death. The argument, if accepted, would cut down the scope of section 5(1). But the true object of section 6 is to widen the net of section 5(1). The scheme of the Act is two-fold. Firstly, there are properties which pass on the death of a person. Section 5(1) imposes duty on their value. Secondly, there are properties in which the deceased had an interest or power of appointment and which really do not pass on his death. The scheme of the Act is to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Estate Duty (Estate Duty Reference No. 95 of 1966 decided by our court on May 20, 1971). In all those cases the property was held in the name of a third person as the benamidar of the deceased. In the first case a garden was held benami. The Andhra Pradesh High Court applied section 6 and held that the value of the garden could not be taken into account in assessing the duty on the estate of the deceased. The court said : "....... so long as the deed stands in the name of another person, it could not be said that it was competent for the deceased to dispose of the property. In that case counsel for the Board seems to have conceded the point. He did not make a distinction between the scope of section 5(1) and section 6 of the Act. And ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
