TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the properties comprised in the two trust deeds were liable to be brought to charge under section 12(1) of the Estate Duty Act, 1953, and whether the whole of the settled properties, or only the reserved shares, were deemed to pass on the settlor's death.
Analysis: The properties under both deeds were conveyed upon trust as a whole, and the deeds expressly reserved benefits in the income of the trust properties for the settlor during his lifetime. Section 12(1) applies where property passes under a settlement made by deed and an interest in such property for life or for a period determinable by death is reserved to the settlor, either expressly or by implication. The requirement is not confined by importing the additional incidents of "settled property" under section 2(19); it is enough that there is a settlement, including a dedication or endowment, together with reservation of interest. The court further held that the reservation was not merely collateral, and that the quantum of the reserved benefit does not limit the extent of the property deemed to pass. Once the settlement with reserved interest falls within section 12(1), the whole of the property so settled is deemed to pass. The reservation of shebaitship also reinforced the existence of a beneficial interest connected with the endowment.
Conclusion: The properties comprised in both trust deeds were dutiable under section 12(1), and the whole of the properties settled under each deed were deemed to pass on the settlor's death. The answer was against the assessee and in favour of the Revenue.
Final Conclusion: The High Court's view was upheld only in relation to the 1953 deed and reversed in relation to the 1959 deed, resulting in liability to estate duty on the entire subject-matter of both settlements.
Ratio Decidendi: Under section 12(1) of the Estate Duty Act, 1953, where a settlor makes a settlement and reserves any interest in the settled property for life or for a period determinable by death, the whole property settled is deemed to pass on death, and the provision is not confined by the narrower concept of "settled property" under section 2(19).
TaxTMI 
