SHAMPUR LAKSHMIDEVAMMA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) WE are concerned in this case with the liability of two of the items of property belonging to the deceased, Shampur Papanna, who died on October 3, 1963. The said two items are, (i) a house bearing No. 8, New High School Road, Visveswarapuram, Bangalore City, and (ii) a house bearing No. 9 situated in the same road. The deceased had made a gift of item No. (i) in favour of his two grand-sons and item No. (ii) in favour of his son under a registered deed of gift dated December 10, 1956. Under the said document, although absolute title was conveyed in favour of the respective donees, there was a reservation made to the effect that the donor (the deceased) and his wife, Smt. Lakshmidevamma, were entitled to reside in the said premises during their lifetime. There was also a recital to the effect that the donees would not be entitled to alienate the properties or part with possession thereof during the lifetime of the donor and his wife. Although the deceased had reserved the right to reside in the said premises during his lifetime and his wife also had a right to reside in the said premises till their lifetime, the said right of residence was exercised by them only in respect of premises bearing No. 9 which had been gifted to their son, Ramesh Chandra Murthy, i.e., item No. (ii) mentioned above. The other premises was not being used by the donor and his wife and they were not in possession of the same for more than two years prior to the death of the donor. When the question of the inclusion of these properties in the chargeable estate under the E.D. Act, 1953 (hereinafter referred to as "the Act"), came up for consideration before the Asst. CED, the accountable person resisted their inclusion on the ground that the conditions were void and, in any event, no duty could be levied in respect of premises No. 8 (item (i) as the said property was governed by the first prov. to s. 10 of the Act. The Assistant Controller rejected the contention of the accountable person and included the value of both the properties for purpose of levying estate duty. The appeal filed by the accountable person before the Appellate Controller of Estate Duty and further appeal to the Tribunal were unsuccessful. At the instance of the accountable person, the following question has been referred to us for our opinion :

(2.) SO far as item No. (ii) referred to above, i.e., premises No. 9 is concerned, it has to be observed that its value was rightly included for purposes of levy of estate duty since the donee did not retain possession and enjoyment to the entire exclusion of the donor. In fact the donor continued to reside there till his death.