Law:

Section:

Section 21, read with section 5 of the Estate Duty Act, 1953 - Foreign property - Deceased was domiciled in India - Father of deceased, who was not domiciled in India, left a will at time of his death, under which a trust was created in respect of certain funds left by him U.K. and deceased became entitled to income of fund for life - Whether value of deceased's interest in aforesaid trust was includible in computation of principal value of estate notwithstanding the fact that property passing on death of deceased had no situs in India - Held, yes FACTS The deceased was domiciled in India. The father of the deceased, who was not domiciled in India, died before the year 1910 leaving a will under which a trust was created in respect of certain funds left by him in the United Kingdom. Under the terms of the said will the deceased became entitled to the income of the funds for life; she was further given the power of appointment of the successors to the fund, and in the event of default of such appointment, the corpus was to pass on to such of her children who attained the age of 21 years. The Deputy Controller held that the deceased had an interest in the income of the fund left under the will of her father and, therefore, it was a case of property passing under section 5 of the Act. The contention of the accountable person that the said amount was not includible in the net principal value of the estate on the ground that the deceased was entitled only to the income from the fund with no power of enjoyment of the corpus and that estate duty had been paid on the entire assets in the United Kingdom at the time of his death prior to 1910, was rejected holding that the term 'property' included an 'interest' in the property and that the 'interest' in 'property' passing on death was chargeable to duty under section 5. On second appeal, the Tribunal held that the settlor, was admittedly domiciled outside India at the time the settlement took effect and the deceased had only a life interest in the settled property which was situate outside India at the time of the death and, therefore, the case fell under section 21(1)(b)( ii). Accordingly, the said inclusion was deleted…

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