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TMI Blog1978 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... (late) Mohamed Ismail created a wakf in favour of himself, his family and his descendants and ultimately for the benefit of the poor, of the properties belonging to him. This wakf was of a permanent character. He dedicated the immovable properties described in the schedule thereunder for his benefit and for the benefit of his family, children and descendants and ultimately for the benefit of the poor Muslims in accordance with the conditions and rules stipulated in the wakf deed. He also appointed his father, Mohamed Musa Sait, as the mutawalli of the aforesaid wakf. After the demise of the father, the office of mutawalli would be hereditary in the family. Clause 4 of the deed provided that the succession to the office of mutawalli would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he death of the said Mohamed Ismail, s. 12 would be attracted, and estate duty on the whole value of the settled properties, namely, Rs. 4,55,000, will have to be paid by the accountable person. This was resisted by the accountable person. His contention was not accepted by the Asst. CED. His appeal before the Appellate Controller failed and, in the appeal, the Income-tax Appellate Tribunal, Madras Bench, also held against the accountable person. Section 12 of the E.D. Act, 1953, may now be quoted: "12. (1) Property passing under any settlement made by the deceased by deed or any other instrument not taking effect as a will whereby an interest in such property for life or any other period determinable by reference to death is reserved e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lor's death " occurring at the end of sub-s. (1) of s. 12 of the Act refer again to the settled properties; but the deeming provision makes that property pass on the settlor's death. In view of the provisions in s. 3(3) of the Act, property passing on the death of the person will have to be construed as including a property which is deemed to pass on the death of such person. Certain conditions have to be satisfied before the deeming provision in s. 12 can be applied. Those conditions are stated in the section itself. The settlement may be made by a deed or any other instrument not taking effect as a will. By that instrument an interest in such property for life or any other period determinable by reference to death must have been reserved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whether such a reservation will amount to a reservation of interest in the settled properties. If such a reservation will amount to a reservation of interest in the property, s. 12 will be attracted. We consider that when a specific provision is made in the deed that from out of the surplus income of the settled properties, a specified share after meeting specified expenses should be paid to the settlor, there is a reservation of interest in the properties. This court in Anantha Iyer v. Mittadar Ramaswami Iyer [1914] MWN 891 (Mad) has gone to the extent of holding that where by a document rents and profits of a certain land were to be received by the creditor for a fixed term of years in lieu of the principal and interest, the document cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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