CONTROLLER OF ESTATE DUTY Vs. NIGUDKAR B B

JUDGEMENT

(1.) THE facts are in a narrow compass. By a deed of settlement dt. 12th Oct., 1948, the settlor, who died on 17th Feb., 1963, had settled certain properties on trust known as "Navare Vishwastha Nidhi" with the objects described differently as "temporary" and "permanent" objects. THE "temporary objects" mainly provided for financial assistance to the members of the settlor's family, while the "permanent objects" provided for public charities and public welfare such as giving of monetary help to needy and worthy students by giving scholarships, loans against guarantee of repayment or against some security for the study of religion, philosophy, etc. Clause (13) of the deed empowered the settlor, i.e., the deceased, to make changes in the temporary objects and even to cancel some of them with a provision that savings caused on account thereof would be expended on permanent objects only. THE Asstt. CED rejected the claim of the accountable person that the value of the properties settled on trust was not includible in the principal value of the estate of the deceased. According to him, the value of the trust property was includible in the principal value of the estate of the deceased under ss. 6, 10 and 12 of the ED Act, 1953. THE Appellate CED confirmed the order of the Asstt. CED in this behalf. THE Tribunal, however, accepted the claim of the accountable person. THE Tribunal has referred to this Court the following question of law at the instance of the Revenue for consideration :"Whether, on the facts and in the circumstances of the case, the trust property of the value of Rs. 3,20,931 settled under the deed of settlement dt. 12th Oct., 1948, was includible while computing the principal value of the property which passed on the death of the settlor, deceased Shri Ganesh Govind Navare, for the levy of estate duty under the ED Act, 1953 ?" Though the question of law is wide, Shri Dhanuka, learned counsel for the Revenue, has contended that the value of the trust property is includible in the principal value of the estate of the deceased under s. 12(1) of the ED Act, 1953, read with or even without the Explanation thereto. In this context, Shri Dhanuka invited our attention to cl. (13) of the deed of trust which empowered the settlor to make changes or even to cancel the temporary objects of the trust during his life-time. He also referred to cl. (3) of the deed of trust to show the nature of the temporary objects of the trust. It was stated that "temporary objects" admittedly reserved an interest in the settled property for the maintenance of the deceased's close relatives. Sec. 12(1) of the ED Act, 1953, reads as under: