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TMI Blog1991 (4) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... situated at Poona is not to be included in the principal value of the estate of the deceased under section 10 of the Estate Duty Act, 1953 ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that furniture of the value of Rs. 52,000 lying in the 'Readymoney house' at Napean Sea Road, Bombay, is not to be included in the principal value of the estate of the deceased under section 10 of the Estate Duty Act, 1953 ?" R. A. No. 12471(Bom) of 1975-76. At the instance of the Controller : "Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the property known as 'Readymoney house' at Napean Sea Road, Bombay, did not pass on the death of the deceased under section 5 or section 7 of the Estate Ditty Act, 1953 ?" R. A. No. 1092/(Bom) of 1975-76. At the instance of the accountable person : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the immovable property known as 'Readymoney house' was deemed to pass on the death of the deceased under section 11 of the Estate Duty Act ?" (2) Whether, on the facts and in the circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Cawasji Jehangir who may succeed to the title of the baronet. The Assistant Controller was of the view that, in addition to the free estate, the properties comprised in the baronetcy trust were also liable to duty on the death of the deceased. Accordingly, he issued notices under section 55 to the trustees who took the stand that no charge to duty was attracted in respect of the trust properties. The trustees also informed the Assistant Controller by their letter dated April 19, 1966, that, pursuant to Sir Cawasji Jehangir Baronetcy Repealing Act, 1964, which came into force from June 2, 1965, Sir Cawasji Jehangir Baronetcy Act, 1911, was revoked and extinguished and the corporation dissolved and all the properties were vested with the present baronet, Sir Hirji Cawasji Jehangir, and requested that the present baronet be considered to be the accountable person for the trust properties. The Assistant Controller did not accept the contentions of the present baronet, the accountable person, that no charge to duty was attracted in respect of the trust properties on the death of the deceased. He computed the value of the various properties comprised in the trust at Rs. 83,93,444, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the properties comprised in the Baronetcy Trust, the Tribunal did not accept the accountable person's contention that the deceased was statutory tenant and was staying in that house as a statutory or protected tenant. According to the Tribunal, the deceased was staying in that house, rather could not have stayed in that house, in any capacity other than the capacity as a baronet. Taking the view that the life interest was capable of bifurcation, the Tribunal concluded that the value of the property known as "Readymoney house" alone was includible in the principal value of the deceased's estate. It is for this reason that all the three questions of law referred to this court at the instance of the accountable person pertain to the inclusion of the value of "Readymoney house" property in the principal value of the deceased's estate and all other questions of law are at the instance of the Revenue. Dr. Balasubramanian, learned counsel for the Revenue, strongly contended that the deceased had a life interest in the Properties comprised in the Baronetcy Trust under the Baronetcy Act of 1911. The purpose of the Act was clear. The life interest was so created only to ensure and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion of the deceased or of any benefit to him, its value was includible in the principal value of the estate. He stated that the Supreme Court decision in the case of CED v. Smt. Parvati Ammal [1974] 97 ITR 621 was applicable in this case and not the Supreme Court decision in the case of CED v. C. R. Ramachandra Gounder [1973] 88 ITR 448. He also referred to and relied upon some other decisions, viz., in the case of CED v. J. N. Elias [1986] 157 ITR 352 (Cal) ; in the case of Dipti Narayan Srimani v. CED [1988] 172 ITR 476 (SC) ; in the case of CED v. Estate of Late W. S. Seshachala Gramani [1989] 180 ITR 431 (Mad) and in the case of CED v. Kamlavati [1979] 120 ITR 456 (SC) in support of his various contentions. However, for reasons to be stated hereinafter, we have not found it necessary to refer to and/or deal with all these cases in detail in the present case. Shri Dastur, learned counsel for the assessee, on the other hand, contended that, in view of our court's judgment in the case of CED v. Official Trustee, Maharashtra State [1990] 186 ITR 463, in which a similar Act, i.e., Sir Jamshetjee Jejeebhoy Baronetcy Fund, was the subject-matter of consideration, it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the accountable person's case before the departmental authorities or before the Tribunal was not that the deceased's life interest in the baronetcy fund was as a holder of office and, therefore, not liable to estate duty at all. Likewise, it was not the case of the Revenue at any earlier stage of the proceedings that the deceased's life interest in the baronetcy fund was not transferable at all. However, there can be no dispute that both the issues raised herein on behalf of the accountable person as well as the Department are not only neat legal questions but can also be considered on other aspects of the questions already referred to us. Having then regard to our court's judgment in the case of CIT v. Home Industries and Co. [1977] 107 ITR 609, wherein, following the Supreme Court judgment in the case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589, it was held that if a different aspect of the same question was raised for the first time before the High Court, it would be permissible for the High Court to allow such aspect to be argued before it, even if that aspect had not been argued before the Tribunal, we have heard both Dr. Balasubramanian and Shri Dast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the first place, we do not think that a life interest which obviously ceases on death so far as the deceased is concerned can be equated with a case of property passing on death as distinct from a case in which an interest ceases on death and, therefore, is deemed to pass on death in terms of section 7(1). Moreover, in view of the Supreme Court decision in CED v. Aloke Mitra [1980] 126 ITR 599, it will have to be held that charge of estate duty under sections 5, 6 and 7 etc., is an integrated charge and, therefore, the property which the deceased held as holder of an office within tile meaning of section 7(4) will not be liable to estate duty under any of the sections. Further, it cannot be overlooked that, as a fact, the deceased had assigned his entire life interest in the Baronetcy Trust in favour of his son, the present baronet, long before his death in the year 1954. Thereafter, the present baronet has been enjoying the said life interest before and after the deceased's death. The only difference in the situation has been that before the deceased's death he enjoyed it as assignee, and after the death as baronet in his own right. The Supreme Court decision in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of sections 7 to 11(a) are or are not applicable loses all its significance. There is no doubt that estate duty is a charge on the property that passes on death as contemplated under section 5 of the Estate Duty Act and sections 6 to 16 create a charge on the property which does not actually pass but which is deemed to pass in certain circumstances. Section 11 is one of those sections. Clause (a) of sub-section (2) which provides that, where a limited interest (like life interest in this case) is disposed of within a certain period before death, unless the bona fide possession and enjoyment of the property is given to the transferee to the entire exclusion of the deceased, such a property could be deemed to have passed on death. In the view we have taken about life interest in this case, it is equally unnecessary to examine this aspect. This takes us to question No. 2 in R. A. No. 1246/(Bom) of 1975-76. The facts as regards this question are that so far as the property "Garden Reach" at Poona is concerned, that was purchased by M/s. Cawasji Jehangir and Company in 1939. This company was started by the deceased and his father, Sir Cawasji Jehangir, first baronet, and each one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provisions of section 10 would have no application to the case as it could not be said that the deceased was not excluded from the gifted property. In this connection, it was found that the deceased had not reserved any benefit to himself and lie was permanently residing in "Readymoney House" at Napean Sea Road. Even assuming for the sake of argument that the deceased had visited the Poona property on some occasions during the last two years of his death, it could not be said that the deceased was not excluded from tile gifted property. In this connection, the Tribunal observed that it had been held in a number of cases that where a gift had been made by husband to his wife and the husband had continued to reside in the gifted property, it would not attract the penalty of George Da Costa's case [1967] 63 ITR 497 (SC). In this connection, it may be noted that, in the Supreme Court case, it was a case of father and son and not of husband and wife. Filial love may not make joint residence between the parents and the children in the house essential or necessary but marital love might make that not only essential and fundamental but sensible, reasonable and practicable. The Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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