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TMI Blog1967 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... death you are entitled to have a share of all those movable and immovable properties in which I have right, title, and interest and possession. With a view to preventing troubles, quarrels and litigations and also for avoiding various difficulties amongst my sons regarding settlement and preservation of the joint properties after my death, before demarcating to each of my heirs all the movable and immovable properties separately through a will or by deeds of settlement I desire to demacrate and give to you the two of my properties amongst other properties mentioned hereunder. In order, however, to remove any obstacle arising out of unforeseen causes to give the same to you through will or otherwise by or under this deed of gift give the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding on the basis of section 10 of the Estate Duty Act. The value of the properties covered by the deed of gift was taken to be Rs. 2,00,000. Sitanath, thereupon, filed an appeal before the Central Board of Revenue, to which the appeal lay under the law as it then stood. He objected to the inclusion of the value of the properties covered by the deed of gift in the principal value of the estate of the deceased, inter alia, on the following grounds : (a) That there was a valid and complete gift made by the deceased more than two years before his death ; (b) That the deceased continued to hold the gifted property merely as a trustee and since possession and enjoyment by trustee was possession and enjoyment of the beneficiaries, the properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th under section 10 of the Estate Duty Act, 1953 ? " At this stage, it is necessary for us to remind ourselves of the language of section 10 of the Estate Duty Act which reads : " Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of, any benefit to him by contract or otherwise : Provided .... " Explaining the sweep of the section, the Supreme Court observed in the case of George da Costa v. Controller of Estate Duty : " The intention of the legislature in enacting section 10 of the Act was to exclude from liability to estate duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gous provision under section 38(2) of the Customs and Inland Revenue Act, 1881, as amended by section 11 of the Customs and Inland Revenue Act, 1889. The second part of the section has two limbs : the deceased must be entirely excluded, (i) from the property, and (ii) from any benefit by contract or otherwise. It was argued for the appellant that the expression ' by contract or otherwise ' should be construed ejusdem generis and reference was made to the decision of Hamilton J. in Attorney-General v. Seccombe. On this aspect of the case, we think that the argument of the appellant is justified. In the context of the section, the word 'otherwise ' should, in our opinion, be construed ejusdem generis and it must be interpreted to mean some k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant disposition or under any collateral disposition. The Supreme Court observed that the aforesaid amendment had no retrospective effect and would not in any way control the statement of law made in the aforesaid judgment. Keeping in view the law as hereinbefore summarised, we have now to examine the arguments advanced on behalf of the assessee. It was contended before us, in the first place, that there was a gift made by the deceased in favour of his son, Panchanan, and as a result of the gift, the properties vested in the son ; but by the same act, there came into existence a trust under which the donor began to hold the gifted properties as trustee for the donee. It was contended, in the next place, that the condition in the deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft, only occasionally according to his needs and even that with the permission of the donor. By the deed of gift it was expressly provided that complete possession and right in the gifted property will vest in the donee only after the death of the donor. As we read this deed, it appears to us that there was no intention of giving anything to the donee in praesenti. Everything was reserved for the future, both possession and enjoyment. The donor himself remained in possession and in enjoyment and reserved to himself the right to help the donee, in his hours of need, only according to his own discretion. The fact that the words ' as your trustee ' were used at several places in the deed punctuating the transaction, will not convert, without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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