Benami property and estate duty: apparent legal competence to dispose can bring the asset within the deceased's estate.

Property standing in the name of a benamidar can fall within the estate-duty net under section 6 of the Estate Duty Act, 1953 if the deceased was competent to dispose of it at death. The text explains that where property was acquired and improved with the real owner's funds but held in another's name, the apparent title holder may still transfer the legal interest standing in that name. Accordingly, beneficial ownership is not decisive for section 6; the statutory focus is on competence to dispose of the property at the time of death. On that basis, such property was treated as includible in the deceased's estate.

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Issues: Whether property standing in the name of a benamidar, but purchased and improved with the real owner's funds, is includible in the deceased's estate under section 6 of the Estate Duty Act, 1953 on the footing that the deceased was competent to dispose of it at death.

Analysis: Section 6 deems property to pass on death if the deceased was competent to dispose of it at the time of death. On the Tribunal's own finding, the property was acquired and constructed with the husband's money in the benami name of his wife, who therefore held legal title against everyone except the true owner. A benamidar may transfer the apparent title and, at the least, can dispose of the interest that stands in her name. The deceased's lack of beneficial ownership did not prevent her from being competent to dispose of the property within the meaning of section 6.

Conclusion: The property was liable to be included in the estate and the answer to the reference was in the negative, in favour of the department and against the assessee.

Final Conclusion: The reference was answered by applying the statutory deeming rule under section 6 to property held benami, so that apparent title in the deceased was sufficient to attract estate duty.

Ratio Decidendi: For purposes of estate duty, property standing in the name of a benamidar is deemed to pass on death if the deceased had apparent legal competence to dispose of it, even though another person is the real owner.

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