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TMI Blog1981 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... s to receive Rs. @ 5 per month out of the estate for personal expenses and religious ceremonies. If she desired to have her maintenance separately, she was to be paid Rs. 80 per month. If she desired to live in a separate house, then she was to be paid Rs. 100 per month. Aukshoy Kumar Ghosh died without any issue. So his wife was given the power to adopt. She wanted to adopt Sambhu Nath Ghosh, son of Rajendra Krishna Ghosh, the first cousin of her deceased husband. An agreement was entered into between Rajendra Krishna Ghosh who had also been appointed guardian of Sambhu Nath Ghosh by the Calcutta High Court and Smt. Charushila Dassi. This agreement was dated July 3, 1913, and the terms were sanctioned by the High Court by an order dated June 30, 1913. The substance of the agreement was as follows : (1) to take the affidavit of assets in her inventory filed by Charushila Dassi in the testamentary proceedings as correct and without question; (2) to deem the accumulations of income of the estate (up to that time) as her personal property; (3) to declare that Charushila Dassi was to be entitled to the whole of the income of the estate subject to her maintaining the adopted so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... life retain in her hands and seize and possess all the parcels of property set out in Part III of Schedule 'A' hereunder and hold the said and will only be responsible for keeping the same in the same condition and the same state of repairs as the same now are subject to reasonable wear and tear and realise the rents, issues and profits thereof paying thereout the outgoings and expenses of management to be incurred by her and of necessary repairs and retain the surplus rents, issues and profits and appropriate the same to her own personal use and benefit absolutely and in full discharge of her right and claim to the said monthly sum of Rs. 2,000 without being accountable in any manner whatsoever to the said Debi Prasanna Ghosh in respect of the income and expenditure in respect of these properties. 23. And it is further declared by and between the parties hereto that the said Smt. Charushila Dassi shall have such right of residence as is provided for in clauses 4, 5 and 6 of the said agreement and that the other clauses of the said agreement as and in so far as the same may still be applicable between the parties herein shall remain in full force and effect." The properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case to bring it into the assessment as the exemption under s. 24 applied here. The Tribunal further held that her rights were derived under the agreement of 1935. In this view the six items of the properties allowed to be retained by Charushila Dassi under the agreement dated November 25, 1935, were held to be exempt in view of s. 24 of the Act. On the aforesaid facts, the Controller applied for a reference and the Tribunal referred the following question for our consideration: " Whether, on the facts and in the circumstances of the case, the six properties retained by Charushila Dassi under the document dated November 25,1935, till her death were governed by the exemption under section 24 of the Estate Duty Act ? " In order to deal with the question, ss. 5 and 7 of the E.D. Act should be considered at the outset. Section 5 of the Act reads as follows : " 5. (1) In the case of every person dying after the commencement of this Act, there shall, save as hereinafter expressly provided, be levied and paid upon the principal value ascertained as hereinafter provided of all property, settled or not settled, including agricultural land situate in the territories which im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor was it in any way equivalent to, an interest in a proportion of the capital of the property charged, sufficient to produce the yearly amount. According to him, it is nothing more nor less than a right to receive the stipulated monthly sum out of the income from the whole of the property charged. It confers no interest in any particular part of the property charged but simply a security extending over the whole. Next he refers to certain decisions for conveying the manner of disposition within s. 24 of the Act. First reference is made to the decision of the Supreme Court in the case of CIT v. N. S. Getti Chettiar [1971] 82 ITR 599. He refers to a passage at pp. 605-606 of the report. It is stated therein that a reading of this section clearly goes to show that the words " disposition ", " conveyance ", " assignment ", " settlement ", " delivery " and It payment " are used as some of the modes of transfer of property. The dictionary gives various meanings for those words but those meanings do not help us. We have to understand the meaning of those words in the context in which they are used. Words in the section of a statute are not to be interpreted by having those words in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Charushila Dassi shall cease to be entitled to the whole of the income of the said estate but she shall be entitled only to a monthly sum of Rs. 2,000 to be paid to her every month in lieu of her maintenance or any other claim on the said estate and she shall be at liberty when she makes over the said estate to Sambhu Nath Ghosh on his attaining majority to retain in her hands, property either in the shape of houses or zamindaries or investment in Government securities or mortgages sufficient to yield her a monthly income of Rs. 2,000. Thereafter, on attaining majority on 7th March, 1932, Sambhu Nath Ghosh, who was then known as Debi Prasanna Ghosh, entered into an agreement with Charushila Dassi on 20th November, 1935. In para. 19 of the agreement it is stated that Debi Prasanna Ghosh requested Smt. Charushila Dassi to transfer unto him all the properties of the estate now in her hands after retaining in her hands such properties as would be sufficient to yield her a net monthly income of Rs. 2,000 to be appropriated by her to her own absolute use and benefit in terms of the said agreement. In pursuance of that it appears that Charushila Dassi retained six items of properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e HUF did not amount to a " disposition " within the meaning of s. 24 and hence the section did not apply. On the facts of the case the Supreme Court held that s. 7 applied as, on the death of the deceased, her interest in the wet land ceased and passed to the other members of the joint family. Reference is also made to the decision of the Supreme Court in the case of CED v. Kantilal Trikamlal [1976] 105 ITR 92. Mr. Pal refers to passage in p. 107 of the report, where the observation of Williams J. in Grinwade v. Federal Commissioner of Taxation [1949] 78 CLR 199 (Australia), dealing with the expression " disposition of property " was quoted. The relevant passage goes like this : " The whole emphasis of paragraph (f) is upon a transaction entered into by one person, which seems to me to mean that where there is an act done by one person with the requisite intent, and as a result there is transfer of value from any property of that person to the property of another person, the conditions of liability are satisfied." Reference is also made to the decision of a single Bench of this High Court in the case of Baidyanath Banerjee v. Asst. CED [1965] 55 ITR (ED) 31. It was held ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rresponding benefit accruing to the adopted son. Section 7 of the E.D. Act was found to be applicable to the case. On the basis of the decision, it is contended by Mr. Pal that by an agreement with the adopted son, only the life interest was created in favour of Charushila Dassi which was nothing but a right to possession of the six items of property and enjoyment of the entire income arising therefrom ceased on the death of Charushila and the adopted son, Debi Prasanna Ghosh, was entitled to possession of the estate and enjoyment of the income which was being possessed and enjoyed by Charushila. Mr. Deb, learned counsel for the accountable person, also refers to the relevant portions of the agreement between Rajendra Krishna Ghosh and Charushila Dassi dated 3rd July, 1913, and the agreement between Charushila Dassi and Debi Prasanna Ghosh, the adopted son, dated 20th November, 1935, and points out that after attaining majority on 7th March, 1932, Debi Prasanna Ghosh became the absolute owner of the estate of the testator Aukshoy Kumar Ghosh and after becoming such absolute owner he settled certain properties, viz., the six items, with Charushila Dassi for the enjoyment of her li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permission of the Government on the payment of an annual nuzzerana. Prior to the adoption, on April 18, 1931, an agreement was entered into between A and D, the natural father of the boy, proposed to be adopted, the agreement being signed only by D. Under the terms of the agreement, could possess and enjoy certain watan lands during her lifetime. Thereafter, there were some disputes between A and her adopted son, R, which were amicably settled and on December 22, 1934, an agreement was entered into between A and R to the effect that A could enjoy the watan lands for her lifetime. A died in 1965 and the question was whether the value of the watan lands was liable to be included in A's estate. R, the accountable person, claimed that in view of s. 24 of the E.D. Act, 1953, the value of the watan lands could not be so included. It was held that on the death of G the watan was liable to lapse and it was only by reason of the adoption made by A that the watan continued. Prior to R's adoption, A had no interest in the lands. Once the adoption was made, that adoption related back to the death of G. The right conferred on A to possess and enjoy the watan lands was conferred by the agreement ..... 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