- (1.) The order under appeal was passed by a Division Bench of the Madras High Court in CED V/s. P.S. Narasimhan, 1993 200 ITR 422 on a reference application under the Estate Duty Act made at the behest of the revenue. The following questions were considered by the High Court. 1. Whether, on the facts and in the circumstances of the case, the value of the agricultural lands settled by the deceased in favour of his wife, including those lands which the lady settled in favour of her relatives, from out of the lands received by her, could be included in the principal value of the estate passing on the death of the deceased 2. Whether, on the facts and in the circumstances of the case, the value of the properties settled by him on his five settlees by documents dated 28.12.1956, was includible in the principal value of the estate on his death 3. Whether, on the facts and in the circumstances of the case, the value of the agricultural lands received by the late P.S. Srinivasa Iyer by way of settlement from the late Shri Ganapathi Subramaniam could be included in the principal value of the estate of the deceased
(2.) We are concerned in these appeals with the first question, leave to appeal having been granted only in respect thereof. The High Court answered this first question in the affirmative and in favour of the revenue. As is obvious, the question relates to Sec. 10 of the Estate Duty Act, 1953 (the Act). The relevant portion thereof reads thus : 10. Gifts whenever made where donor not entirely excluded Property taken under any gift, whenever made, shall be deemed to pass on the donors death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the done and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise : Provided that the property shall not be deemed to pass by reason only that it was not, as from the date of the gift, exclusively retained as aforesaid, if by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the donor or of any benefit to him for at least two years before the death.
(3.) The Tribunal, in an appeal filed by the present appellant as the accountable person in respect of the estate of her late husband, had held on a consideration of all the evidences placed on record that the lands gifted to the appellant by her deceased husband had to be regarded as belonging to her and as having gone out of the hands of the deceased husband. The Tribunal said: Looking at the position, therefore, we have nothing before us to hold that all the transactions from 1956 to 1962 are bogus or manipulated or a make-believe. Transfers made to the settlees were by registered deeds. There is nothing to show that the settlees had not taken possession of these lands and enjoyed them for themselves. Some of the settlees of the deceased had alienated some of the lands. The deceaseds wife had alienated a good portion of her lands and the alienations were recognised even by the High Court.;