TMI Blog1973 (3) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the death of the deceased. In this view, it is not necessary for us to consider the meaning of the word " extent " found in section 10 - - - - - Dated:- 16-3-1973 - Judge(s) : H. R. KHANNA., K. S. HEGDE., P. JAGANMOHAN REDDY JUDGMENT The judgment of the court was delivered by HEGDE J.---Both these appeals, by special leave, arise from the judgment of the High Court of Madras in a reference under section 64(1) of the Estate Duty Act, 1953 (to be hereinafter referred to as " the Act ") The question of law referred in that case is : " Whether, on the facts and in the circumstances of the case, the properties settled by the deceased by the six deeds of settlement (two of them dated 26th June, 1951, and four of them dated 30th June, 1951) valued at Rs. 7,38,656 or any part thereof was not liable for inclusion in the estate of the deceased as property deemed to pass on his death ? " The High Court answered that question partly in favour of the revenue and partly in favour of the assessee. It opined that the value of the property gifted in favour of the wife of the deceased is not to be taken into consideration in computing the value of the property that passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and my wife during our lifetime. " The deed in favour of the wife contained the following words : " In the hope that you will support me during my lifetime, I do hereby settle . . . " The Deputy Controller held that the deceased had reserved to himself an interest for life in the properties comprised in the above settlements, within the meaning of section 12 of the Act. He accordingly, included the value of those properties for the purpose of determining the value of the properties that passed on the death of the deceased. The accountable persons appealed to the Central Board of Direct Taxes, New Delhi. They contended before the Board that the conditions or stipulations contained in the deeds of settlement in favour of the sons, minor grandsons and daughter merely amounted to an expression of a desire and hence could not be interpreted as a reservation within the meaning of section 12 as those conditions or stipulations did not detract from the absolute character of the settlements. With regard to the settlement made in favour of the wife, it was argued before the Board that the deceased had expressed only a hope that his wife would support him and maintain him during his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the death of the deceased. We are also in agreement with the High Court that section 12 is wholly inapplicable to the facts of the case. That section, to the extent material for our present purpose, reads : " 12. (1) Property passing under any settlement made by the deceased by deed or any other instrument not taking effect as a will whereby an interest in such property for life or any other period determinable by reference to death is reserved either expressly or by implication to the settlor or whereby the settlor may have reserved to himself the right by the exercise of any power to restore to himself or to reclaim the absolute interest in such property shall be deemed to pass on the settlor's death. " (The provisos to the section, the Explanation as well as sub-section (2) of section 12 are not relevant for our present purpose). So far as the applicability of section 12(1) is concerned, it is nobody's case that the beneficiaries became entitled to the properties settled on them after the death of the deceased. There is no support for the contention of the revenue that an interest in the properties settled was reserved to the deceased during his lifetime or for any per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly upon the gift, and of which property bona fide possession and enjoyment shall not have been thenceforward retained by the donee to the entire exclusion of the donor from such possession and enjoyment, or of any benefit to him, by contract or otherwise.' The crux of the section lies in two parts : (1) the donee must bona fide have assumed possession and enjoyment of the property, which is the subject-matter of gift, to the exclusion of the the donor, immediately upon the gift, and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him, by contract or otherwise. As a matter of construction we are of opinion that both these conditions are cumulative. Unless each of these conditions is satisfied, the property would be liable to estate duty under section 10 of the Act. " Proceeding further, the learned judge observed : " 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 generi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be adopted. This is a well-accepted rule of construction. It is impermissible for the court to read into a taxing provision any words which are not there or exclude words which are there. The words found in the provision must be given their natural meaning. In Da Costa's case, this Court opined that there are only two parts to the section. We have set out those parts earlier. The contention of the revenue runs counter to the reasoning adopted in Da Costa's case. The contention advanced on behalf of the assessee finds support from some of the observations found in Da Costa's case. The provisions for annual payments and maintenance made in the deeds as seen earlier are not charged on the properties settled. Hence the deceased cannot be said to have retained any interest in the properties settled. Therefore, it cannot be said that he retained any benefit either in the properties settled or in respect of their possession. Hence, in our opinion, the facts of the case do not come within the scope of section 10. We, accordingly, allow the appeal of the assessee and hold that the value of the properties gifted or any part thereof is not able to be included in computing the value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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