Estate duty inclusion turned on a valid partition, leaving only a 1/5th share of the house taxable.

A later partition arrangement was treated as genuine and valid, under which the deceased exchanged his earlier limited life interest in the Kakinada house and his share in another house for an absolute 1/5th share in the Kakinada property. On that footing, the arrangement was not regarded as a disposition or determination of his interest within section 11(1) of the Estate Duty Act, 1953, and section 7 was also held inapplicable because he did not die with a life interest in the entire house. The estate duty consequence was that only the deceased's 1/5th share in the Kakinada house was includible in the principal value of the estate, not the full property value.

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Issues: Whether, on the facts and in the circumstances of the case, the entire value of the Kakinada house was includible in the principal value of the estate of the deceased, or only a 1/5th share was liable to be included.

Analysis: Under the partition arrangement of 30 March 1952, the deceased had only a life interest in the Kakinada house, with the remainder going to his sons. By the later partition deed of 16 June 1964, the parties divided both houses afresh and the deceased received an absolute 1/5th share in the Kakinada house in place of his earlier limited interest and his share in the subsequently acquired house. The arrangement was held to be genuine and valid, and it did not operate as a disposition or determination of the deceased's interest within the meaning of section 11(1) of the Estate Duty Act, 1953. Section 7 was also held inapplicable because the deceased did not die with a life interest in the entire house.

Conclusion: Only 1/5th share in the Kakinada house was includible in the principal value of the estate of the deceased, and not the entire value of the property.

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