Life interest and right of residence can constitute estate duty property, with cessation on death triggering deemed passing.

A life interest with an exclusive right of residence in a bungalow is property within the inclusive definition in the Estate Duty Act. On the widow's death, that interest ceased and the benefit under the will passed to the sons, so the property was treated as passing, or deemed to pass, on death under the Act. Because the life interest extended to the whole income of the property, valuation on that basis was also justified. The property was therefore correctly included in the estate as property passing on the widow's death, and the question was answered in the affirmative in favour of the Revenue.

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Issues: Whether the property known as "Mangala Vilas" was correctly included in the estate of the deceased as property passing on her death.

Analysis: The widow was given a life interest in the bungalow with an absolute right of residence for her lifetime, while the sons were only permitted to live with her amicably and were required to move out if differences arose. On her death, her interest in the property ceased, and the sons obtained the corresponding benefit under the will. Such an interest in the property was "property" within the inclusive definition in section 2(15) of the Estate Duty Act. The property therefore passed, or was deemed to pass, on death within sections 5 and 7 of the Estate Duty Act. Since her interest extended to the whole income of the property, valuation under section 40(a) was also justified.

Conclusion: The property was rightly included in the estate as property passing on the widow's death, and the question was answered in the affirmative, in favour of the Revenue.

Ratio Decidendi: A life interest with an exclusive right of residence constitutes property for estate duty purposes, and on the death of the life tenant the cessation of that interest results in deemed passing of property to the remaindermen under the Estate Duty Act.

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