Law:

Section:

Section 12 read with section 10 of the Estate Duty Act, 1953 - Property which is deemed to pass - Settlement with reservation - Deceased settled properties in favour of his sons, grandsons, daughter and wife absolutely - Settlement deeds provided that his sons and grandsons would pay him certain annual amounts for his lifetime, daughter would maintain him and his wife during their life time and expressed hope that his wife would support him during his lifetime - No charge was created on property settled on daughter in respect of her liability to maintain her father and mother - Similarly no enforceable liability was created on property settled on wife - There was also no provision in deeds enabling deceased to reclaim property or its possession - Whether none of conditions laid down in section 12 was attracted to provisions contained in deeds of settlement - Held, yes - Whether facts of case also did not come within scope of section 10 therefore, value of properties gifted or any part thereof was not liable to be included in computing value of estate that passed on death of deceased - Held, yes FACTS By the deeds in questions, the deceased settled the properties in favour of his sons, minor grandsons, daughter and wife. The deeds in favour of his sons and minor grandsons provided for payment of Rs. 1000 per year to deceased for his domestic expenses. The deed in favour of the daughter provided a provision that she had to maintain the deceased and his wife during their life time. The deed in favour of the wife provided that she would support deceased during his lifetime. After death of the deceased, the Deputy Controller held that the deceased had reserved to himself an interest for life in the properties comprised in the above settlements, within the meaning of section 12. He accordingly, included the value of those properties for the purpose of determining the value of the properties that passed on the death of the deceased. The accountable persons appealed to the Central Board of Direct Taxes. They contended that the conditions or stipulations contained in the deeds of settlement in favour of the sons, minor grandsons and daughter merely amounted to an…

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