1995 (6) TMI 5

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....of the case, the Appellate Tribunal was right in law and had valid materials in holding that the property gifted by the deceased to Vasan Charitable Trust is not chargeable to estate duty in the hands of the accountable person as property passing on the death of the deceased ? " One Sri T. S. Srinivasa Iyer (S. S. Vasan) died on August 26, 1969. During his lifetime, he had created a trust called "Vasan Charitable Trust" under a deed dated April 27, 1968. Initially, the corpus consisted of Rs. 15,000 which the deceased settled on the trust. The trustees were the settlor, his wife and the settlor's son and his wife. On July 8, 1968, the deceased transferred to the trust land measuring 89 grounds and 1,042 sq. ft. These lands together with ....

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....arge. Accordingly, the Tribunal confirmed the order passed by the Appellate Controller. Before us, the learned standing counsel for the Department submitted that the time factor as stated in section 22 of the Act was not considered by the Tribunal. It was further submitted that even in the decision of this court in CED v. H. N. Markandan [1974] 94 ITR 144 the time factor as stated in section 22 of the Act was not considered. Therefore, according to the learned standing counsel, since the gift was made within two years prior to the date of the death of the deceased, exemption under section 22 of the Act is not available, and that the property is chargeable under section 5 of the Act. Section 9 of the Act states as under: "(1) Proper....

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....ns contained in section 22 of the Act wherein it is stated that the gift should have been made by the deceased two years prior to the date of his death. According to the Assistant Controller of Estate Duty, since, in the present case, the gift was made within a period of two years from the date of death of the deceased, the gifted property is chargeable to estate duty as the said property would be deemed to have been passed on the date of death of the deceased. This approach made by the Assistant Controller is not correct. Only when the property is chargeable to estate duty he must see whether there is any exemption granted for payment of estate duty. Since the property in question was not deemed to have passed on the date of the death of d....