TMI Blog1983 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... iness in exhibition of films. The company was incorporated on December 19, 1958, and the share capital of the company consisted of 750 shares of Rs. 1,000 each. Of the said 750 shares, 225 shares were held by the deceased, 25 shares by the wife of the deceased, 425 shares by Sri Shanmugam, brother of Shri Sivaji Ganesan, and the' balance of shares by the other relatives of Shri Sivaji Ganesan. The company suffered losses of Rs. 41,753 and Rs. 1,01,527, respectively, in the years 1960 and 1961. The last balance-sheet prior to the death of the deceased was as on December 31, 1962. The accountable person worked out the value of the shares of the deceased on the basis of the break-up of the company at Rs. 827 but returned the value of the shares for estate duty purposes adopting Rs. 1,000 per share. The Assistant Controller of Estate Duty found that though in the first two years there had been a loss in the company, its buildings, land, etc., had substantially gone up in price, since the date of incorporation and the date of death of the deceased and that the accountable person had herself sold her shares of the company at Rs. 1,500 per share after the death of the deceased. Taking R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the actual marriage took place, a marriage settlement was drawn up on December 17, 1945, between the Court of Wards and the Rajkumari Mathuramba Ammani, the finance. According to the said marriage settlement, a sum of Rs. 8 lakhs was to be transferred to the Official Trustee of Madras for investing the same in Government Securities and utilising the income from the same for the named beneficiary, Rajkumari Mathuramba Ammani. It appears that this was also one of the events which preceded the marriage and assured the bride continuous income to her after the marriage. On May 29, 1954, by which time the deceased had come out of the tutelage of the Court of Wards, the said marriage settlement dated December 17, 1945, had been revoked by a deed of revocation with the consent of the beneficiary, Rajkumari Mathuramba Ammani. According to this deed of revocation, in view of the Estates Abolition Act, and the subsequent agricultural reforms introduced by the State, the Raja had been deprived of substantial portion of his wealth as well as income with the result it had become difficult for him to carry on the day to day activities without calling in aid the sum of Rs. 8 lakhs, the life int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal found that the settlement of the year 1945, cannot be said to be a settlement made by the husband on the wife at all, that the settlement was entered into between the Court of Wards and the bride of the deceased and that the sum of Rs. 8 lakhs was set apart as a trust for the benefit of the bride and, therefore, the marriage cannot be taken to be the consideration for the said settlement. According to the Tribunal, if at the time of the marriage of two persons a third party were to make a settlement and it is accepted, neither of the parties to the marriage could be regarded as foreign to the settlement in the first place, but they cannot be said to have entered into an agreement without consideration and, therefore, the Department's contention that the settlement of the year 1945 was one without consideration and liable to be set aside for that reason was not correct. The Tribunal also considered the nature and effect of the modified agreement of the year 1954. According to the Tribunal under the amended agreement of 1954, the original settlement of the year 1945 was broken and the sum of Rs. 8 lakhs was released from the settlement and as a consideration for this, the brid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though the accountable person says that the sale of shares after two years of the death of the deceased could not be taken into account for the purpose of determining the value of the shares on the date of death of the deceased, we find that there is no evidence to indicate that there was considerable variation in price between the date of the death of the deceased and the actual date of the sale of the shares by the accountable person. As pointed out by the Tribunal, after the death of the deceased, the accountable person could not have been in position to assert as against the other major shareholders who were in management and control of the company and, therefore, the fact that the accountable person was able to sell at Rs. 1,500 per share on the date of death of the deceased would indicate that the shares would have been more valuable on the date of death of deceased. Therefore, the value of the shares at Rs. 1,500 per share can reasonably be taken as the fair market value especially when there is no evidence adduced by the accountable person that due to certain specified factors there was a rise in price after the death of the deceased and, therefore, the value at Rs. 1,500 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettlement deed of the year 1945 or otherwise. Therefore, the deed dated May 29, 1954, executed by the deceased and his wife is only a deed of revocation of the earlier settlement deed dated December 17, 1945, and it does not amount to a deed of substitution of the original arrangement of the year 1945. After the execution of the revocation deed, the deceased was not under a liability to pay any amount to his wife and the Tribunal is, therefore, in error in proceeding on the basis that the deceased undertook the liability in a sum of Rs. 4 lakhs as against the original sum of Rs. 8 lakhs set apart under the settlement deed of the year 1945. It is seen that it is only under the note dated September 13, 1954, made by the private secretary to the deceased Raja and submitted to the wife of the deceased, an outright payment of Rs. 4 lakhs is set out. The said note cannot take the place of an enforceable document. Even assuming that the arrangement between the deceased Raja and his wife in September, 1954, could be culled out from the said note, that arrangement will be devoid of any consideration for the wife of the Raja has given up her right under the original settlement of the year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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