CONTROLLER OF ESTATE DUTY Vs. HILAL K

JUDGEMENT

(1.) IN this reference arising under the E.D. Act, 1953, the following question has been referred under Section 64(1) of the Act :

(2.) THE deceased owned a property in Madras consisting of a building and 16 grounds of land. He had a son and three daughters. By a gift deed dated 1st March, 1970, he divided the property into four lots and gifted each lot to the son and three daughters, respectively. Part of the property in which the building was situated fell to the lot of one of the daughters and the deceased continued to live in that property till his death on 7th December, 1970. THE accountable person claimed exemption with reference to this property under Section 33(1)(n) and the Asst. Controller granted the exemption. THE accountable person had some other grievance against the assessment and took the matter in appeal to the Appellate Controller. THE Appellate Controller considered that the exemption given by the Asst. Controller under Section 33(1)(n) was erroneous and he, therefore, issued an enhancement notice and for the reasons given in his order enhanced the dutiable estate by Rs. 1,00,000 by withdrawing the exemption granted. THE accountable person appealed to the Tribunal and contended that the exemption under Section 33(1)(n) was properly granted by the Asst. Controller. THE Tribunal was of the opinion that as on the date of the gift the property was exclusively used by the deceased for his residence the exemption under Section 33(1)(n) was available to the accountable person. In the course of its order, the Tribunal pointed out in para. 8 :

(3.) FROM the language of Section 33(1)(n), it appears that the house or part thereof which belongs to the deceased must have been exclusively used by the deceased for his residence at the time of his death. Mere user as residence for any earlier period at the time of or before the gift is really immaterial. What is required by the provision is exclusive user by the deceased for his residence at the time of his death. In the present case the Tribunal's finding is that the building belonged to someone else and the deceased was by sufferance allowed to stay there. The fact that the build ing belonged to someone else cannot be in dispute. In view of the deceased or the donor being a Mohammedan, delivery of possession was essential in order to effectuate the gift. In the gift document, delivery of possession is referred to. Therefore, the deceased had delivered possession to the donee on 1st March, 1970. Thereafter, the deceased could not have any right of user in the said building unless he had, under the terms of the document, reserved such a gift. There is no such reservation in the present case. Consequently, the deceased would have been there only as a permissive user of the building. The expression "exclusively used by the deceased for his residence" would postulate the existence of a right of user and not a mere permissive user or user otherwise than under a right. Even assuming that permissive user or user otherwise than under a right is enough to satisfy the requirements of the provision, the user as residence in the present case is not exclusive because it is not stated that the donee after taking delivery of the building did not occupy the building. In the absence of proof of any exclusive user of the building by the deceased as of right, the requirement of the provision is not fulfilled in the present case. In this view, it is unnecessary to go into the other contentions advanced before us.