Full Judgment Text
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PETITIONER:
CONTROLLER OF ESTATE DUTY, KARNATAKA, BANGALORE
Vs.
RESPONDENT:
UMESH RUDRA
DATE OF JUDGMENT15/01/1979
BENCH:
ACT:
Estate Duty Act, 1953, S. 10, enjoyment to the entire
exclusion of the donor, applicability when husband is donor.
HEADNOTE:
The deceased gifted his residential porperty to his
wife, but continued to live there with her. On his death,
while calculating the estate duty, the appellant included
the value of the residential property, in the principal
value of the estate, on the ground that the deceased
continued to reside with the wife, even after the gift.
Upholding the High Court’s judgment, and rejecting the
special leave petition, the Court
^
HELD : Section 10 cannot be construed in a manner which
would require the husband who has gifted residential house
to the wife, to live separately from her. When the wife
obtains possession of the house and remains in enjoyment of
it, it cannot be said that the husband who resides with the
wife, is, on that account, in possession or enjoyment of the
house so as to attract the applicability of Section 10. [952
B-D]
Mrs. Shamsum Nehar Mansur v. Controller of Estate Duty,
West Bengal 71 ITR 301 : Sunil Roy v. Controller of Estate
Duty, Calcutta, 77 ITR 667; Mohammad Bhai & Anr. v.
Controller of Estate Duty, A.P., 69 ITR 770; Kamla Pandalai
v. Controller of Estate Duty, 105 ITR 531; approved.
Bibi Ahmedi Begum v. Controller of Estate Duty, U.P.,
83 ITR 303, overruled.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Special Leave Petition
(Civil) No. 6331/78.
From the Judgment and Order dated 1-6-78 of the
Karnataka High Court at Bangalore in T.R.C. No. 1/75
R. N. Sachthey and Miss A. Subhashni for the
Petitioner.
The Order of the Court was delivered by
BHAGWATI, J. This petition for special leave to appeal
against an order of the High Court of Karnataka raises a
question of interpretation of section 10 of the Estate Duty
Act, 1953. The deceased made a gift of his residential
property to his wife on 27th November, 1957 and on his death
which occurred on 2nd August, 1963, the question arose
whether the value of the residential property was liable to
be included in the principal value of the estate passing on
the death of the deceased under section 10. The argument of
the Revenue was that even after the gift the deceased
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continued to reside with the wife and, therefore, it
952
could not be said that the wife retained possession and
enjoyment of the residential property to the entire
exclusion of the deceased and hence section 10 was
attracted. Now there can be no doubt that on a proper
interpretation of section 10, the donee must retain
possession and enjoyment of the property gifted to the
entire exclusion of the donor, in order to repel the
applicability of that section. But we do not see how in the
present case it can at all be said that the wife did not
retain possession and enjoyment of the residential house to
the exclusion of the deceased, merely because the deceased
in his capacity as husband continued to reside with the
wife. Section 10 cannot possibly be construed in a manner
which would require the husband who has gifted residential
house to the wife to live separately from her, if he wants
to escape from the mischief of that section. Such an
interpretation would subvert family life and social order
and would be contrary to morality and good sense. When the
residential house is gifted to the wife and she obtains
possession and remains in enjoyment of it, it cannot be said
that the husband who resides with the wife, as in a happy
family life every husband would be expected to do, is, on
that account, in possession of the residential house or in
enjoyment of it. It is the wife who is in possession and
enjoyment of the residential house and the husband, by
reason of the marital ties, continues to reside with the
wife. We do not think that section 10 would at all be
attracted in such a case.
We find that this view has been taken by the Calcutta
High Court in Mrs. Shamsum Nehar Mansur v. Controller of
Estate Duty, West Bengal(1) and Sunil Roy v. Controller of
Estate Duty, Calcutta(2), the Andhra Pradesh High Court in
Mohammed Bhai and another v. Controller of Estate Duty,(3)
the Madras High Court in Kamla Pandalai v. Controller of
Estate Duty,(4) and the Karnataka High Court in the judgment
under appeal and it commends itself to us. We think that
theise High Courts rightly refused to apply section 10 to a
case like the present where the husband has gifted the
residential house to the wife and thereafter continued to
reside with the wife in the residential house. The contrary
view taken by the Allahabad High Court in Bibi Ahmedi Begum
v. Controller of Estate Duty, U.P. (5) must be held to be
erroneous.
We accordingly reject the special leave petition.
M. R. Petition dismissed.
953