Estate duty exemption under section 33(1)(o) can apply independently of section 10 and depend on the gift-to-death interval.

Section 33(1)(o) of the Estate Duty Act operates independently of section 10: even where gifted property is deemed to pass on death under section 10, it may still be exempt if the gift was made to a specified close relative more than five years before the donor's death. The five-year condition is measured by the interval between the gift and death, not by the date the exemption clause was inserted. On that construction, a 1963 gift could qualify where the donor died after 1 April 1965, so the exemption remains available if the temporal condition is satisfied.

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Issues: (i) Whether property included under section 10 of the Estate Duty Act, 1953, could nevertheless qualify for exemption under section 33(1)(o) of that Act when gifted to the deceased's spouse, son, daughter, brother or sister beyond five years before death; (ii) Whether section 33(1)(o) could apply to a gift made before the insertion of that clause with effect from 1 April 1965, where the donor died after that date.

Issue (i): Whether property included under section 10 of the Estate Duty Act, 1953, could nevertheless qualify for exemption under section 33(1)(o) of that Act when gifted to the deceased's spouse, son, daughter, brother or sister beyond five years before death.

Analysis: Section 10 deems property taken under a gift to pass on the donor's death where bona fide possession and enjoyment are not immediately assumed and retained by the donee to the entire exclusion of the donor. Section 33(1)(o), however, expressly grants a further exemption from estate duty in respect of property taken under a gift to specified close relatives if the gift was made beyond five years before death. The two provisions operate in different fields: section 10 determines when property is deemed to pass, while section 33 removes such property from charge where its conditions are satisfied.

Conclusion: The exemption under section 33(1)(o) remains available even where section 10 applies; the finding is in favour of the assessee.

Issue (ii): Whether section 33(1)(o) could apply to a gift made before the insertion of that clause with effect from 1 April 1965, where the donor died after that date.

Analysis: The words "beyond a period of five years before his death" refer to the interval between the gift and the donor's death, not to the date on which the clause was inserted or the assessment year in which the gift-tax position arose. Reading the proviso as confining the exemption only to gifts made after 1 April 1964 would nullify the intended five-year exemption period for pre-existing gifts. The legislative scheme shows that the relevant date is the death of the donor, and the gift in question, having been made in 1963 and the donor having died in 1974, satisfied the temporal condition.

Conclusion: Section 33(1)(o) applies to the 1963 gift, and the objection based on the date of insertion fails; the finding is in favour of the assessee.

Final Conclusion: The reference was answered by holding that the gift fell within the estate duty exemption and that the timing of the clause's insertion did not defeat that exemption.

Ratio Decidendi: Section 33(1)(o) of the Estate Duty Act, 1953 is an exemption provision that operates independently of section 10 and is governed by the interval between the gift and the donor's death, not by the date on which the clause was inserted.

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