TaxTMI 
TaxTMI 
1973 (3) TMI 55
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....d in favour of the wife of the deceased is not to be taken into consideration in computing the value of the property that passed on the death of the deceased. In respect of the properties gifted to the sons, grandsons and the daughter of the deceased only the annual payments that had to be made to the deceased as well as his right to maintenance should be valued for the purpose of determining the extent of the right that passed on his death. The facts of the case material for the purpose of deciding the question of law formulated above as could be gathered from the case stated are as follows : One Ratnasabapathy Pillai was the owner of the properties with which we are concerned in this case. He died on February 5, 1959, leaving behind him his four sons, some grandsons, wife and daughter who are the accountable persons. They furnished an account of the properties passing on the death of the deceased to the Deputy Controller of Estate Duty, Madras, who was the assessing authority. The Deputy Controller did not accept the correctness of the return made by them. He added to the return made, the value of the following properties settled by the deceased on his wife, sons, grandsons....
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.... argued before the Board that the deceased had expressed only a hope that his wife would support him and maintain him during his lifetime, and the words used in the deed were vague and unenforceable in law as a stipulation. The Board rejected these contentions. It opined that the main point in issue in the case was whether an interest in the property was reserved by the deceased. It held that all the settlements fell within the scope of section 12 or at any rate it came within section 10 of the Act. Thereafter, at the instance of the accountable persons, the question set out earlier was referred to the High Court. We have earlier set out the answer given by the High Court. The High Court held that section 12 was wholly inapplicable to the facts of the case and the case has to be considered only under section 10. Even under that section, the High Court opined, the entire value of the property settled on the various beneficiaries cannot be taken into consideration. All that can be taken into consideration is the value of the interest reserved by the deceased to himself during his lifetime. Further, it held that the value of the properties settled on the wife of the deceased should....
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....tention of the revenue that an interest in the properties settled was reserved to the deceased during his lifetime or for any period after the properties were settled ; nor is there any provision in the deeds enabling the deceased to reclaim the property or its possession under any circumstance. None of the conditions laid down in section 12(1) are attracted to the provisions contained in the deeds of settlement. Now, turning to section 10, the portion that is material for our present purpose is found in the main section. The provisos to that section are not relevant. The material part of the section reads : " Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thence forward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. " This section provides that unless bona fide possession and enjoyment of the property gifted is assumed immediately after the gift by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise, the s....
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....or otherwise. It was argued for the appellant that the expression ' by contract or otherwise ' should be construed ejusdem generis and reference was made to the decision of Hamilton J. in Attorney-General v. Seccombe. On this aspect of the case, we think that the argument of the appellant is justified. In the context of the section, the word 'otherwise' should, in our opinion, be construed ejusdem generis and it must be interpreted to mean some kind of legal obligation or some transaction enforceable at law or in equity which, though not in the form of a contract, may confer a benefit on the donor. " It was contended on behalf of the assessee that the expression " of any benefit to him by contract or otherwise " in section 10 must be in the property settled and not a benefit arising from the transaction resulting in the gift. To put it differently the assessee's contention was that the benefit by contract or otherwise must be referable to the property gifted because all the earlier conditions stipulated in the section refer to the property gifted.' If it was otherwise, the counsel for the assessee urged, section 10 cannot be considered to have two parts as held in Da Costa's cas....