TMI Blog1983 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... e value should be computed after allowing a margin for the life interest of the deceased's son in the property ?" Under a settlement deed dated February 3, 1966, the deceased's husband settled certain properties on the deceased for her lifetime. After the death of the deceased, the properties are to be enjoyed by the deceased's son for his lifetime and after his death the properties are to vest absolutely in the son's sons. On the death of the deceased, the Assistant Controller of Estate Duty came to the conclusion that there was a change in the beneficial ownership of the properties, as the properties passed from her hand to her son, the next life estate holder of the properties. He, therefore, considered them as having passed on the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal value of the property, and while determining the principal value, the subsequent life interest cannot at all be taken into account. Learned counsel points out that section 40 provides for special method of determining the principal value of the property in the circumstances, referred to under that section and that the cesser of interest should be taken to have occurred a moment before death and the coming into existence of the subsequent life interest a moment after death. Therefore, while valuing the principal value of that property, the coming into existence of the subsequent life interest later cannot be taken into account. It cannot be disputed in this case that there is a cesser of life interest on the death of the deceased and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holder is later in point of time, then the determination of the principal value of the property should be without reference to the subsequent accrual of benefit in favour of the son. However, we are of the view that the cesser of interest as also the creation of benefit on the son as a result of the cesser of interest are simultaneous, both taking place on the death of the deceased. The moment there is a cesser of interest, there is a creation of benefit in favour of the deceased's son. Since both the cesser of interest as also the creation of life interest in favour of the son are simultaneous, the interest in favour of the son should be taken to have come into existence on the death of the deceased the same moment when there is a cesser o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
