MANI V S Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS reference under S. 64(1) of the Estate Duty Act turns on construction of the words "to the extent" in S. 10 of the Act. S. Vaidyanatha Iyer died on 5-9-1958. On 8-6-1956 he addressed the Kumbakonam Bank Ltd, informing it of his intention that the 'two fixed deposits, one for Rs. 15000 and the other for Rs. 10000, should be taken by his second son V. S. Mani and requesting the Bank to pay the principal and interest due on the deposits on maturity to him. On 11-10-1956 V. S. Mani advised the bank that the interest due on the two deposits might be credited to the current account of his father Vaidyanatha Iyer. Both the letters were given effect to by the Bank as intimated by it on 15-10-1956. It appears that the fixed deposits matured for payment on 14th and 15 October 1956.

(2.) THE words "to the extent" employed in S. 10 are not to be found either in the English or Australian Acts relating to estate duty. Though the phraseology of S. 10 in the Indian Act would appear to have been substantially borrowed from the English Act, we fail to understand why the Indian Legislature introduced those words in the section unless its intention was to bring to tax only that value of property gifted which is still retained by the donor. THE section in case of partial gift, so to state in the context of S. 10, charges only the part covered by the non-exclusion and non-retention clauses in the section. To the extent to which the donor retains as interest in the entirety of the property given away by him as gift, there will be pro tanto liability to estate duty.