Registered transfer of immovable property required for estate exclusion; possession alone does not defeat estate duty inclusion.

For immovable property, an effective gift or settlement requires a legally valid registered transfer; mere delivery of possession does not divest title. Registered settlement deeds executed within two years of death did not satisfy the statutory requirement for exclusion from the estate and the settled property was therefore includible. Agricultural land for which no registered deed of gift was executed likewise remained vested in the deceased at death, so it was properly treated as estate property. The note states that, under the Estate Duty Act, property not transferred by a completed registered instrument continues to form part of the deceased's estate.

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Issues: (i) Whether property settled in favour of the deceased's wife, sons and grandsons under registered deeds executed within two years of death was liable to inclusion in the estate under section 9 of the Estate Duty Act; (ii) Whether 136.82 acres of agricultural land, in respect of which no registered deed of gift was executed, was rightly treated as property of the deceased on the date of death.

Issue (i): Whether property settled in favour of the deceased's wife, sons and grandsons under registered deeds executed within two years of death was liable to inclusion in the estate under section 9 of the Estate Duty Act.

Analysis: Section 9 applies to property taken under a disposition purporting to operate as an immediate gift inter vivos only when the disposition is bona fide made two years or more before death. For immovable property of the requisite value, a gift or settlement must be effected by a registered instrument under section 123 of the Transfer of Property Act. Mere delivery of possession or enjoyment, without an effective legal transfer, does not complete the gift. The registered settlement deeds here were executed within two years of death and therefore could not take the property outside the estate.

Conclusion: The property covered by the settlement deeds was includible in the estate and the issue was answered against the accountable persons.

Issue (ii): Whether 136.82 acres of agricultural land, in respect of which no registered deed of gift was executed, was rightly treated as property of the deceased on the date of death.

Analysis: Where immovable property is not transferred by a legally effective registered instrument, title continues to vest in the owner. Since the Estate Duty Act proceeds on the deceased's competency to dispose of property at death, property still vested in the deceased falls within section 6. In the absence of any registered deed or other legally sufficient transfer, delivery of possession alone did not divest the deceased of title.

Conclusion: The land was rightly treated as property of the deceased and the issue was answered against the accountable persons.

Final Conclusion: Both reference questions were answered in favour of the revenue, and the disputed properties were held liable to estate duty inclusion.

Ratio Decidendi: For immovable property, an effective transfer must comply with the legally recognised mode of divestiture, and under the Estate Duty Act a mere delivery of possession without a completed transfer does not exclude the property from the deceased's estate; where the registered gift or settlement is not made bona fide at least two years before death, inclusion follows.

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