9911796707
TMI Blog1984 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise there is no equivalent word in the numerous vernacular languages in India and people in India do not know or use such a word. The Nizam of Hyderabad, after police action, became concerned for his dependants. He, therefore, created numerous trusts in protection of their safety and welfare. Prince Shahmat Ali Khan Trust is one such trust created with a corpus of Rs. 12,88,169 for the benefit of his grandson. The Nizam himself is one of the trustees of the trust. As to remuneration of trustees, clause 18 of the deed directs that the trustees are to be rewarded with a sum not exceeding Rs. 3,000 per annum, if only the trustees resolve to pay for the services rendered by them. Having regard to this direction, the Additional Assistant Controller of Estate Duty, A-Ward, the Appellate Controller of Estate Duty-the two-interpreted clauses 2 and 18 and held section 10 of the Estate Duty Act, 1953 (34 of 1953) ("the Act"), is attracted and included Rs. 12,88,169 in the principal value of the estate of the Nizam for purposes of duty to be paid under the Act. The Appellate Tribunal, however, reversed that decision. Thereupon, at the instance of the Revenue, the following question is ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the United Kingdom Finance Act, 1940, were considered. The Australian cases were treated as authority in New Zealand as in In re Adams [1932] N.Z.L.R. 741 and vice versa. Speaking of the British Acts, it was held, they are alike the provision in Australia. The only substantial difference between the two it was noted section 102 brings in " any benefit to him of whatsoever kind or in any way whatsoever whether enforceable at law or in equity or not ", whereas section 11 and section 43 bring in " any benefit to him by contract or otherwise ". The interpretation of the British Acts in Attorney General v. Seccombe [1911] 2 KB 688 was elaborately considered in St. Aubyn v. Attorney-General [1952] AC 15 and the decision helped in considering the Australian Act. The Australian High Court in John Lang v. Thomas Prout Webb (Commissioner of Taxes for Victoria) [1912] 13 CLR 503, interpreted section 102 before the words " any benefit to him by contract or otherwise " were inserted by the Stamp Duties Amendment Act of 1931. This case was approved by the Privy Council once before the amendment was inserted and later after amendment in Clifford John Chick v. Commissioner of Stamp Duties [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Privy Council, the High Court of Australia and the cases rendered under the British enactments were followed. Soon thereafter, it was realised that the conclusion relevant to " the two limbs " is " cumulative " created problems, whereas the Privy Council said the two limbs are to be satisfied. Both conclusions created problems but in different spheres. In India, the problem as to cumulative satisfaction intermittently brought forth the question of interpretation of section 10 again and again for reconsideration in the High Courts as well in the Supreme Court. In CIT CED v. N.R. Ramarathnam [1973] 91 ITR 1 (SC), the case shows a vain attempt was made by the Revenue to review the whole approach in interpretation. That attempt was repelled and at page 4, it is observed, " Mr. Karkhanis, the learned counsel for the Department, sought to satisfy us that that decision requires reconsideration. We have not prevented him from rearguing the question of law which has already been concluded by our decision". In CED v.Smt. Parvati Ammal[1974] 97 ITR 621 (SC), it was argued and repeated (at page 638) that George da Costa's case [1967] 63 ITR 497 (SC) was not correctly decided. In CED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in India. In Norman Clyde Oakes v. Commissioner of Stamp Duties of New South Wales [1954] AC 57, Lord Reid observed, " the two limbs have given rise to much litigation " and identified the difficulty: " it is now clear that it is not sufficient to bring a case within the scope of these sections to take the situation as a whole and find that the settlor has continued to enjoy substantial advantage which have some relation to the settled property; it is necessary to consider the nature and source of each of these advantages and determine whether or not it is a benefit of such a kind as to come within the scope of the section ". Lord Simonds referred to the observations of Lord Reid as respects " benefit " in second limb and said, the subject requires " further examination " and observed, " it is possible that in the consideration of this very difficult part of the sub-section, it may be pertinent in some cases to enquire whether the benefit derived by the donor is one that impairs or detracts from the donee's enjoyment of the gift. Their Lordships, with great respect, think that this is a matter which may require further examination, but, as they have already said, they are clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lia in Owens' case (88 CLR 67) and the majority view in that case was approved at page 446 in Chick's case [1958] AC 435, adopting the reasoning in British statutes in St. Aubyn's case [1952] AC 15. The dissent expressed by Williams and Taylor JJ. in Owens' case (88 CLR 67) was not approved. That is the history of Munro's case [1934] AC 61. We are, in the instant case, unable to concur with the view of the Tribunal that remuneration of trustees relates to " outgoings " (even without considering what the expression connotes), since we hold the remuneration directed to be paid to the trustees in law is a potential benefit, hence, a benefit within the meaning of the second limb and the Nizam of Hyderabad retained by contract a benefit of the kind indicated in the; second limb and, therefore, section 10 is attracted on the facts. It is next argued that the value of potential benefit be ascertained and only such value of the benefit be included for purposes of duty, not the entirety of the amount, i.e., Rs. 12,88,169. Such a contention, it is argued, is not supported by the decision in Parvati Ammal's case [1974] 97 ITR 621 (SC). We do no better than refer in that case how the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
