RAVINDRA GUNVANTLAL Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS reference under the ED Act raises a short question affecting the levy of estate duty on certain property forming the subject matter of a settlement. The settlement we have to consider was made by one Gunvantlal Jivanlal (hereinafter referred to as the deceased) and his wife, Bai Jasud, on 27th Jan., 1951. The deceased settled a sum of Rs. 50,000 and certain policies of insurance on his life of the aggregate value of Rs. 2,00,000 of which the surrender value at the date of the settlement was Rs. 67,413 15 0 and Bai Jasud brought in a sum of Rs. 50,000 belonging to her in the settlement. The deceased and Bai Jasud were appointed trustees and the settlement declared that the trustees shall hold the trust funds upon the trusts and subject to the powers, provisions, declarations and agreements contained in the settlement. Clauses 3 and 4 of the settlement provided for the disposal of the income after meeting the expenses of management and preservation of immovable property, if any, purchased out of the trust funds and of them, cl. 3, which is the material clause for the purpose of the present reference, ran as follows :

(2.) THE disposition of the corpus was dealt with in cls. 5, 6 and 7 and sub cls. (a) and (c) of cl. 5 provided as under :

(3.) CLAUSE 9 was relied upon before the CBDT on behalf of the Revenue but no reliance was placed upon it before us and it is therefore not necessary to make any reference to it. Some reference was made in the course of the arguments to cl. 10 which conferred power on the deceased to give directions to the trustees in certain matters but in our view it is not a material clause and nothing turns upon it. Clause 11 was the next clause on which the strongest reliance was placed on behalf of the Revenue and it made the following provision :