Charged annuity treated as interest in property, with death extinguishing the burden and creating estate duty benefit.

A periodic annuity secured by an express charge over specified property was treated as an interest in property for section 7 of the Estate Duty Act, 1953, because the recipient could look to identifiable assets for payment and was not limited to a bare personal covenant. On the deceased's death, the charge stood discharged and the sons were relieved of the burden, so a benefit accrued to them. The annual right to receive the payment was also described as property under section 2(15), and its cessation produced a taxable advantage. The section 40 objection was not considered because it had not been raised in the reference or Tribunal proceedings.

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Issues: Whether the annuity payable to the deceased under the partition deed created an interest in property so that, on her death, a benefit accrued to the sons within section 7 of the Estate Duty Act, 1953.

Analysis: The partition deed showed that the deceased had relinquished her claims in consideration of a monthly payment secured by an express charge over the sons' properties, including the properties received on partition. A charge creates more than a mere personal covenant, because the creditor has a right to look to specified property for payment. The Court held that section 7 does not require a transfer of title in the nature of a mortgage; it is enough if the deceased had an interest in property. The right to receive the annuity, secured on specific properties, was treated as an interest in property. On the deceased's death, the charge stood discharged and the sons obtained the benefit of being freed from the liability. Even apart from the charge, the annual right to receive Rs. 6,000 constituted property within section 2(15) of the Estate Duty Act, 1953, and the cessation of that right conferred a financial benefit on the sons. The challenge based on section 40 was not entertained because it had not formed part of the reference or Tribunal proceedings.

Conclusion: Section 7 of the Estate Duty Act, 1953 applied, and the question was answered in the affirmative against the assessee.

Final Conclusion: The amount representing the annuity was includible in the estate, as the deceased's enforceable right secured on property ceased on death and benefited the sons by releasing them from the burden.

Ratio Decidendi: A right to receive a periodic payment secured by an express charge on specified property is an interest in property for section 7 of the Estate Duty Act, 1953, and the extinction of that right on death gives rise to a taxable benefit in favour of the persons relieved of the charge.

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