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Issues: (i) Whether the deceased's interest in the corpus and accumulated income of Trust Nos. II and III was a vested interest in possession so as to be includible in the principal value of the estate and outside the exemption under section 23 of the Estate Duty Act, 1953. (ii) Whether deduction from the principal value of the estate on account of estate duty payable was admissible.
Issue (i): Whether the deceased's interest in the corpus and accumulated income of Trust Nos. II and III was a vested interest in possession so as to be includible in the principal value of the estate and outside the exemption under section 23 of the Estate Duty Act, 1953.
Analysis: The trust deeds showed that the deceased was intended to receive the corpus, with intermediate income applied for his benefit and a general power of appointment conferred upon him. The limitation to hand over the corpus on a future date did not make the interest contingent where the beneficial interest had already vested. The reasoning also rejected the plea that section 23 applied, because the interest had not remained a mere expectancy and the statutory exemption was not attracted on the facts found.
Conclusion: The interest was held to be a vested interest in possession, assessable in the estate, and section 23 did not exempt it; the finding was against the accountable person.
Issue (ii): Whether deduction from the principal value of the estate on account of estate duty payable was admissible.
Analysis: The claim for deduction was treated as settled against the accountable person and required no further elaboration.
Conclusion: The deduction was disallowed; the finding was against the accountable person.
Final Conclusion: The substantive dispute was resolved in favour of the Revenue, with the deceased's interest in the relevant trusts treated as part of the estate and the claimed deduction rejected.
Ratio Decidendi: A beneficial interest that has already vested, even though enjoyment or distribution is postponed, is chargeable in the estate on death and is not excluded by section 23 unless the statutory conditions for exemption are strictly satisfied.
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