9911796707
TMI Blog1986 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... a and was liable to be transferred from place to place. The property was managed by the deceased himself and the income from these lands was credited in his books to the account of the donees. All the expenditure in connection with the earning of such income was also debited to the same account. The Assistant Controller in the proceedings for assessment to estate duty took the view that the entire income of the gifted property had come into the possession of the deceased and was used by him for his business notwithstanding the fact that separate accounts of the donees have been maintained in' the books in respect of such amounts. He, therefore, took the view that the donees could not be said to have assumed possession and enjoyment of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the Appellate Controller that the settlor had not reserved any right under the settlement nor did he derive any benefit out of the gifted property and that since there was no competent person to look after the lands on behalf of the donees, the deceased was looking after them on their behalf. The Tribunal thus confirmed the finding of the Appellate Controller as already stated. With regard to section 46 of the Estate Duty Act, the Tribunal took the view that the donor had not made any reservations in the settlements and he had derived no benefit of whatsoever out of the income or the corpus of the gifted properties. The indebtedness was found to have occurred purely by force of the circumstances, namely, that the son-in-law was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vated the land on behalf of the donees, a conclusion could not be drawn that the donor had reserved any interest or that as a matter of right he was entitled to enjoy the properties which were already gifted by him. In view of this, the first question has to be answered in the affirmative and in favour of the accountable person. In addition, we may point out that question No. 1 is also covered by the decision of this court in CED v. Estate of Late V. Shyamala Anni [1979] 119 ITR 391. That was also a case in which the deceased executed settlement deeds gifting properties to various relations. The Tribunal had found that the donees had assumed possession of the gifted lands in pursuance of the settlement deeds and there was no evidence to sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant part of section 44 of the Act reads as follows : " In determining the value of an estate for the purpose of estate duty, allowance shall be made for funeral expenses (not exceeding rupees one thousand) and for debts and incumbrances; but an allowance shall not be made (a) for debts incurred by the deceased, or incumbrances created by a disposition made by the deceased, unless, subject to the provisions of section 27, such debts or incumbrances were incurred or created bona fide for full consideration in money or money's worth wholly for the deceased's own use and benefit and take effect out of his interest. " Other clauses of section 44 are not material for our purpose. In so far as the relevant part of section 44 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned income for and on behalf of the donees. This amount was outstanding against him to the credit of the donees and that is how the liability has arisen. The amount outstanding in the accounts of the donees could not be for the use of the donor himself. The basic requirement of clause (a) of section 44 of the Act is, therefore, not satisfied. There is thus no occasion at all for invoking the provisions of section 46 of the Estate Duty Act. The Tribunal is, therefore, right in taking the view that section 46 could not be invoked by the Revenue. Accordingly, question No. 2 has to be answered in the affirmative and in favour of the accountable person. The two questions referred to this court are answered as follows: Question No. 1 In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
