NARAINDAS MENGHRAJ Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE following question has been referred to this court for its opinion by the Income-tax Appellate Tribunal at the instance of the accountable person with reference to the estate duty proceedings arising on the death of his father, one Menghraj Thakurdas :

(2.) A building site measuring 4 grounds and 610 sq. ft. in Plot No. 4, Avadi Road, Kilpauk, Madras, was purchased under a registered sale deed dated May 25, 1963, in the name of Smt. Hemibai Mangharam, wife of Menghraj Thakurdas. The said Menghraj Thakurdas died on November 17, 1969. On the ground that the said deceased had provided funds for the purchase of the property in the name of his wife, Hemibai Mangharam, the deceased was taken to be a beneficial owner of the said property in the estate duty assessment. The Assistant Controller added the market value of the said vacant site to the principal value of the estate as furnished by the accountable person on the ground that the said house site belonged to the deceased at the time of his death and, therefore, the property in question should be taken to have passed on his death. The accountable person objected to this addition and contended that though the deceased provided funds necessary for his wife for the purchase of the house site, that will not make him the owner of the house site; that the deceased had intended to confer on his wife the benefit of the house site and, therefore, the value of the site cannot be added to the estate of the deceased. This objection was overruled by the Assistant Controller of Estate Duty. On appeal by the accountable person, the appellate authority upheld the contention of the accountable person. There was a further appeal by the Revenue before the Tribunal contending that since the consideration had proceeded from the deceased, he should be taken to be the beneficial owner and that as per section 82 of the Trusts Act, the person who provided the consideration for the purchase should be taken to be the true owner, notwithstanding the fact that the sale deed stood in the name of the wife of the deceased. The Tribunal held that section 82 of the Trusts Act stands attracted on the facts of this case and the onus of showing the intention of the person who provided funds for the purchase of the property to benefit the person in whose name the property has been purchased is on the purchaser and that so long the transferee does not prove the intention, the person who provided funds should be taken to be the owner of the property. Aggrieved by the decision of the Tribunal, the accountable person has come to this court by way of this reference.