9911796707
TMI Blog1974 (6) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the following manner. The original owner of the property was Adapala Krishna Reddy. He died on 29th November, 1963. He had landed property. On September 11, 1954, he transferred under a sale deed ten acres of land to Seetharamamma, the younger sister of his wife. He further executed on September 5, 1957, a gift deed in favour of the same lady in respect of six acres of land. Five years later, he changed his mind and executed a deed of settlement on December 1, 1962, in respect of the same ten acres of land, which he had sold on September 11, 1954, in favour of Seetharamamma, to his brother-in-law's son, D. S. Reddy, and latter's wife, Indiramma. In this sale deed, he stated that the sale deed dated September 11, 1954, in favour of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ife, Indiramma, should be included in the estate of Krishna Reddy for the purpose of imposing estate duty. It is common ground that D. S. Reddy is the accountable person. The view of the revenue is that the 16 acres of land which originally belonged to the estate of Krishna Reddy devolved on Seetharamamma, D. S. Reddy and Indiramma by virtue of the compromise which was entered into only 16 days before the death of Krishna Reddy and, consequently, it comes within the scope of section 9 of the Estate Duty Act, 1953. The Assistant Controller of Estate Duty as well as the Appellate Controller of Estate Duty (Southern Zone) upheld the contention of the revenue and decided that these 16 acres and another extent of eight acres should be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of right to interfere with her possession. It was on this basis, she sought the relief of permanent injunction restraining the defendants from interfering with her possession of the 16 acres of land. It may be noted here that the deceased person was the first defendant in the suit and D. S. Reddy and his wife were defendants Nos. 2 and 3. These defendants asserted that the conveyances in favour of Seetharamamma were sham and nominal and the possession of the land continued with Krishna Reddy and subsequently on execution of the deeds of December 1, 1962, and December 21, 1962, D. S. Reddy and his wife came to be in possession of the properties. It was these claims and contentions that were compromised in the suit, O.S. No. 33/1963. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and defendant 3 is hereby cancelled. 3. It is prayed that the hon'ble court may be pleased to pass the decree in accordance with the terms of this compromise." The plaintiff as well as the defendants signed the compromise memorandum. A reading of the first term of the compromise would show that Seetharamamma relinquished her right under the registered settlement deed executed on September 5, 1957, by Krishna Reddy in her favour. In fact, she agreed for the cancellation of the said settlement deed. D. S. Reddy and his wife are declared to be entitled to items 4, 5 and 6 of the suit, namely, that land of six acres which was the subject-matter of the settlement deed dated September 5, 1957. It is further stated that D. S. Reddy and his w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 126 of the Transfer of Property Act. Since the gift deed was not set aside in any such manner, that must be deemed to be continuing in force by the time of the compromise. When Seetharamamma agreed to relinquish her rights in the six acres under the compromise, it can only mean that she gave a gift of the property to D. S. Reddy and his wife. He points out that in fact gift-tax was levied and collected not only in respect of this six acres of land, but also in respect of the other land. So, no estate duty is leviable on this six acres. Mere levy of gift-tax does not preclude the revenue from imposing estate duty, if it is so leviable under the provisions of the Estate Duty Act. Imposition of gift-tax has only probative value (vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale deed dated September 11, 1954, executed in favour of Seetharamamma by Krishna Reddy. The second term of the compromise specifically states that Seetharamamma shall be entitled to items 1, 2 and 3 in accordance with the sale deed dated September 11, 1954. The memorandum of compromise goes a step further and says that the settlement deed executed by Krishna Reddy on December 1, 1962, in favour of D. S. Reddy and his wife was cancelled. That means the parties agreed to the affirmation of the sale deed dated September 11, 1954, executed in favour of Seetharamamma. This conclusion is further fortified by another provision, namely, that out of ten acres of land which Seetharamamma got under the said sale deed, she should relinquish two a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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