UMESH RUDRA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Bangalore Bench, has referred the following question for a decision of this Court:

(2.) One B.Rudra alias Rudrashetty was the owner of the house by name 'Rajajtadri' and the proceedings relate to the estate duty leviable in regard to his estate, he having died on 2-8-1963. By a registered deed dt. 27th November 1957 he has gifted the residential house to his wife. The gift was more than two years prior to his death. The estate duty authorities, sought to include the value of the said house in determining the principal value of the estate paasang on his death on the ground that the donee had not retained possession and enjoyment to the entire exclusion of the donor in respect of the said house The accountable person prefeired an appeal to the Appellate Controller of Estate Duty, but his contention was no' upheld. The appeal preferred by the accountable person in this behalf to the Tribunal did not meet w'th success. At the instance of the accountable person, the question above referred to has been referred to this Court

(3.) The finding of the authorities has been that the gilt was a genume one, but they have held that the value of the house is includible in the principal value of the estate passing on the death under Sec. 10 of the Estate Duty Act, 1953 (hereinafter referred to as the Act), merely because the deceased who was the husband of the donee continued to beside in the house till his death The Tribunal mainly sought to rely on certain observations made by the Supreme Court in George Da Costa v. Controller of Estate Duty, 63 ITR. 497. Similar question had to be considered by the High Court of Calcutta and Andhra Pradesh after the Supreme Court rendered its decision in the above case. The High Court of Madras has also considered the said question after the Supreme Court rendered its declsion. They have held that in similar circumstances where the gift is by the husband to the wife of a residential house, the mere fact that he continued to reside in it till his death would not amount to the donee not retaming the property to the entire exclusion of the donor and it cannot be said that the mere residence of the husband in such circumstancesl would amount to he being m possession and enjoyment of the house, he having nothing to do with its possession and enjoyment The decisions of the High Court of Calcutta have been leported in Shamsum Nehar Mansur v. Controller of Estate Duty, 71 ITR 301. and Sunil Roy v. Controller of Estate Duty, 77 ITR 668. and that of the Andhra Pradesh High Court in Mohammed Bhai v Controller of Estate Duty, 69 ITR 770. In Mohammed Bhai's case(4) at page 777 jaganmohan Reddy, CJ (as he then was) observed as follows :