Estate duty and Hindu joint family principles govern trust property inclusion and only the deceased's share passing on death.

Property settled in trust remains includible in the estate under section 10 of the Estate Duty Act where the donor retains possession, uses the property for his own business, and keeps the beneficial enjoyment, because the transfer does not divest him of the required benefit. On the facts, the Rs. 82,000 was therefore treated as part of the estate, and section 12 was not applied. In contrast, a Hindu joint family may subsist even between husband and wife alone, so the deceased was not treated as owning the whole coparcenary interest. Only his share in the joint family property passed on death, and only that share was liable to estate duty.

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Issues: (i) Whether Rs. 82,000 settled in trust but retained in the deceased's custody and used by him was includible in the estate under section 10 of the Estate Duty Act. (ii) Whether the entire coparcenary interest of the deceased in the joint Hindu family property passed on his death.

Issue (i): Whether Rs. 82,000 settled in trust but retained in the deceased's custody and used by him was includible in the estate under section 10 of the Estate Duty Act.

Analysis: The amount of Rs. 82,000 remained with the deceased, was utilised by him in his money-lending business, and yielded benefit to him, while the trust did not receive the benefit of the income. On the governing test under section 10, the donor must part with possession to the extent the property admits and must not retain any benefit for himself. The retained beneficial enjoyment brought the case within section 10, and section 12 was not applicable on the facts found.

Conclusion: The inclusion of Rs. 82,000 in the estate was and this issue was decided against the assessee.

Issue (ii): Whether the entire coparcenary interest of the deceased in the joint Hindu family property passed on his death.

Analysis: A Hindu joint family may consist of a husband and wife, and the existence of a joint family does not depend on the presence of more than one male member. On the facts, the deceased and his wife constituted a joint Hindu family, so the property was not treated as if the deceased alone owned the whole coparcenary interest. Only the deceased's share in the joint family property could be said to pass on death.

Conclusion: The whole coparcenary interest did not pass; only the deceased's half share passed, and this issue was decided in favour of the assessee.

Final Conclusion: The reference was answered partly for the revenue and partly for the assessee, with the inclusion of Rs. 82,000 upheld but only the deceased's share in the joint family property held liable to estate duty.

Ratio Decidendi: For estate duty purposes, property settled in trust remains includible under section 10 where the donor retains beneficial enjoyment, and a Hindu joint family may subsist with a husband and wife, so only the deceased's share in joint family property passes on death.

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