Estate duty on foreign settled property: deceased's life interest remains chargeable when domicile in India is shown.

Foreign movable property forming settled property remains within the charge to estate duty where the deceased was domiciled in India at death, and the deceased's life interest in that property is includible in the principal value of the estate. Section 21(1)(b) is read as using the disjunctive "or" deliberately; clause (ii) is not a proviso that limits clause (i). The scheme, legislative history, definition of settled property, and territorial exclusions under the Act support taxation of such foreign property notwithstanding the absence of an Indian situs.

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Issues: Whether the value of foreign movable property in which the deceased had only a life interest was exempt from estate duty under section 21(1)(b) of the Estate Duty Act, 1953, and whether section 21(1)(b)(ii) operated as a proviso to section 21(1)(b)(i).

Analysis: Section 5(1) imposes estate duty on property passing on death, while section 21 defines the territorial exclusions for property situated outside India. The statutory scheme does not require the foreign movable property to have an Indian situs where the deceased was domiciled in India at death, and clause (ii) is not merely a proviso to clause (i). The use of the disjunctive "or" in section 21(1)(b) was deliberate and the court declined to read it as "and". The legislative history, the structure of the provision, the definition of "settled property" in section 2(19), and the object of the enactment showed that foreign movable property of a deceased domiciled in India remains within the charge, including settled property in which the deceased had a life interest.

Conclusion: The sum representing the value of the deceased's life interest in the foreign trust property was liable to be included in the principal value of the estate and was not exempt under section 21(1)(b).

Ratio Decidendi: Under the Estate Duty Act, 1953, foreign movable property is chargeable where the deceased was domiciled in India at death, and in the case of settled property the domicile of the settlor does not exclude liability under section 21(1)(b)(i) when the deceased had a life interest.

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