- (1.) The following question was referred to the High Court under S. 64(1) of the Indian Estate Duty Act, 1953 : "Whether on the facts and in the circumstances of the case, the Trust Fund Prince Shahmat Ali Khan is liable to be included in the estate of late Mir Osman Ali Khan Bahadur under S. 10 of the Estate Duty Act."
(2.) The High Court has answered the question in the affirmative and in favour of the revenue. The present appeal is from this judgment and order of the High Court. The facts broadly stated are as follows : H.E.H. The Nizam Sir Mir Osman Ali Khan Bahadur died on 24-2-1967. Under an indenture made at Hyderabad on 21-3-1957 he created a trust known as Prince Shalmat Ali Khan Trust settling certain shares specified therein for the benefit of his grandson. Clause 18 of the Trust Deed provides as follows : Clause 18 : It is hereby further expressly agreed and declared that each of the Trustees shall be entitled to charge remuneration and be remunerated for rendering service as Trustee of these presents out of the income of the Trust property and the Trustees shall pay such remuneration to each of the Trustees as may be fixed by them by a unanimous resolution in that behalf from time to time provided that the amount of such remuneration payable to any one Trustee for services rendered during any one year shall not exceed the sum of Rs. 3,000/- (Rupees three thousand)."
(3.) In making the estate duty assessment the Additional Assistant Controller of Estate Duty, A-Ward, Special Circle-I, by his order dated 25-1-1973 included in the dutiable estate of the Nizam, the sum of Rs. 12,88,169 representing the corpus of the said trust at the time of death of the deceased under S. 10 of the Estate Duty Act. This view was upheld by the Appellate Controller. In appeal, however, the Tribunal held that S. 10 of the Estate Duty Act will not apply in the present case. It, therefore, allowed the appeal filed by the accountable person. In reference, however, the High Court has answered the question in favour of the revenue holding that S. 10 of the Estate Duty Act is attracted and the entire corpus of the trust fund is includible in the estate of the deceased.;