Deeming fiction under estate duty law treats extinguishment of debt or right as disposition even without conscious intention.

Explanation 2 to section 2(15) of the Estate Duty Act, 1953 deems the extinguishment of a debt or other right at the expense of the deceased to be a disposition in favour of the beneficiary. The statutory fiction turns on the result of extinguishment, not on proof that the deceased consciously intended, or consciously omitted, to bring it about. A debt becoming time-barred through the deceased's inaction is sufficient to attract the deeming provision, because the provision is designed to prevent property from escaping estate duty.

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Issues: Whether the extinguishment of a debt or other right amounts to a disposition under Explanation 2 to section 2(15) of the Estate Duty Act, 1953 only if it is consciously brought about or suffered by the deceased.

Analysis: Explanation 2 deems the extinguishment at the expense of the deceased of a debt or other right to be a disposition made by the deceased in favour of the person benefiting from that extinguishment. The statutory fiction is directed to the result of the extinguishment and does not, on its language, import a requirement that the deceased must have acted with a conscious intention to cause the debt or right to become extinguished. A debt becoming time-barred through the deceased's inaction is sufficient to attract the deeming provision, and the fiction is intended to prevent such property from escaping estate duty.

Conclusion: The requirement of conscious action or conscious inaction is not necessary. The extinguishment of a debt or right by the deceased's action or inaction, whether conscious or unconscious, amounts to a disposition under Explanation 2 to section 2(15) of the Estate Duty Act, 1953.

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