1980 (9) TMI 33 - HC - Income Tax

Deceased not domiciled in India at death, foreign property exempt from estate duty

The court determined that the deceased was not domiciled in India at the time of her death, based on the analysis of her domicile of origin and subsequent ... Estate Duty Issues Involved:1. Determination of the deceased's domicile at the time of her death.2. Liability of foreign movable property to estate duty under the Estate Duty Act, 1953.Issue-Wise Detailed Analysis:1. Determination of the Deceased's Domicile at the Time of Her Death:The central question was whether the deceased was domiciled in India at the time of her death. The facts revealed that the deceased, born in Bombay in 1910, had a domicile of origin outside India, as indicated by her first passport issued by the Czechoslovakian Republic in 1924, showing her domicile as Vienna. Upon her marriage in 1929 to George Melnikoff, she acquired his domicile by law, as per Section 15 of the Indian Succession Act, 1925.The domicile of George Melnikoff was crucial. Despite residing and conducting business in India, the court found no substantial evidence to conclude that he intended to make India his permanent home, thus retaining his domicile of origin outside India. The court noted that the ties to one's domicile of origin are strong and require cogent evidence to establish a new domicile of choice. The mere fact that George had a business in India and obtained a naturalization certificate did not suffice to prove an intention to settle permanently in India.The court also considered the deceased's actions post-George's death in 1954. Despite her continuous stay in India until her death in 1965, the Tribunal accepted explanations for her inability to travel and relied on her declaration in a foreign liquor permit application indicating her intention to make Austria her permanent home. This declaration demonstrated that she did not intend to make India her permanent home, thus failing to establish a domicile of choice in India after George's death.2. Liability of Foreign Movable Property to Estate Duty:Under Section 21(1) of the Estate Duty Act, 1953, foreign movable property is excluded from estate duty unless the deceased was domiciled in India at the time of death. Given the court's conclusion that the deceased was not domiciled in India, the foreign movable property valued at Rs. 4,33,066 was not liable for estate duty.The Tribunal's finding that the deceased was not domiciled in India was upheld, leading to the exclusion of the foreign movable property from the estate liable to estate duty.Conclusion:The court answered the question in the negative, concluding that the deceased was not domiciled in India at the time of her death. Consequently, the foreign movable property was not subject to estate duty under the Estate Duty Act, 1953. The applicant was ordered to pay the costs of the reference to the respondent.