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TMI Blog1982 (7) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ny one or more of them to reside free of rent in the said house until the same was sold for the purpose of distribution. In the event of remarriage of Banoobai, there was a discretion given to the trustees to permit her to continue to reside in and occupy the said house or not. If the trustees declined to permit Banoobai on her remarriage to reside in the said house, the trustees could even thereafter in their discretion again allow her to occupy the said house for such period and upon such terms as they thought fit. The trust deed further provided that after the death of the said settlor and the said Banoobai, the trustees should, as soon as convenient, sell the said property. Half the net sale proceeds were to be held by the trustees on trust to divide the same amongst such one or more of, the said three daughters of Banoobai as shall attain the age of 21 years or marry under that age in equal shares. The remaining half of the proceeds were to be invested and the investments were to be held upon trust to divide the net income thereof in three equal parts and pay one such part to each of the said Armaiti, Meherbai and Gulbai upon attaining the age of 21 years or marrying under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lkeshwar Road, Bombay, or any part thereof was property belonging to the deceased as contemplated under section 33(1)(n) of the Estate Duty Act, 1953 ? (2) Whether, on the facts and in the circumstances of the case, the accountable person was entitled to the exemption under section 33(1)(n) of the E.D. Act, 1953 ?" It is obvious from the manner in which the two questions have been framed that the answer to the second question will depend on the view which we take in respect of the first question posed. Mr. Mukherjee, learned counsel appearing on behalf of the accountable person, has placed heavy reliance on a decision of the Andhra Pradesh High Court in CED v. Estate of late Sanka Simhachalam [1975] 99 ITR 370, in which a Division Bench of the Andhra Pradesh High Court has taken the view that the words " belonging to " in s. 33(1) of the E.D. Act, though no doubt they denote absolute ownership, signify even possession of an interest less than that of full ownership, if. the context so requires. It was held that the word " property " in s. 33(1)(n) of the E.D. Act read with s. 2(15) includes not only the properties wherein the deceased possessed absolute ownership in the corpus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Is follows: "To the extent specified against each of the clauses in this subsection, no estate duty shall be payable in respect of property of any of the following kinds belonging to the deceased which passes on his death- . ...... (n) one house or part thereof exclusively used by the deceased for his residence, to the extent the principal value thereof does not exceed rupees one lakh if such house is situate in a place with a population exceeding ten thousand, and the full principal value thereof, in any other case." Now, before we go to the requirements of s. 33(1)(n), it requires to be pointed out that the only correct provision under which the consequences of the interest which Banoobai had, namely, the right of free residence could be taken into account for the purposes of estate duty would be s. 7(1) of the E.D. Act. That section provides as follows: " Subject to the provisions of this section, property in which the deceased or any other person had an interest ceasing on the death of the deceased, shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cesser of such interest, including, in particular, a coparcenary i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be clear that she had neither a right to the house nor a right to any part thereof. If s. 33(1)(n) is properly read, the main part of s. 33(l) highlights the fact that the property in respect of which no estate duty is made payable is the property of the kinds specified in the several clauses of s. 33(1). Therefore, the property in respect of which a claim for exemption under s. 33(1)(n) is made must satisfy the description or the requirements of the relevant clause. In so far as cl. (n) is concerned, the requirement is that the property must be a house or a part thereof and it must be exclusively used by the deceased and if these requirements are satisfied, then the further requirement is that the house or the part thereof must belong to the deceased. Strictly speaking, the question as to whether the house or the part thereof belonged to the deceased in the instant case does not really arise for consideration because it can hardly be disputed that the house was not exclusively used by the deceased for her residence. There is no finding that Banoobai was alone in occupation of the entire house. Indeed, on the trust deed, Banoobai and her daughters in their own right were entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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