Law:

Section:

Section 7 of the Estate Duty Act, 1953 - Interests ceasing on death - Whether reservation of entire usufruct or portion thereof in favour of donor or someone else made while making an absolute and valid gift of corpus constitutes valid and enforceable obligation and it is an exception to general rule that condition that derogates from full rights of ownership in corpus gifted by a Muslim is of no effect - Held, yes - Whether right to usufruct is a present right and merely because usufructs in relation to which such right is conferred come into being at future time, gift cannot be said to be gift in future - Held, yes - 'S' executed a settlement deed under which he conveyed property to his daughter 'J' with absolute rights subject to condition that settlor during his lifetime and after his death, his second wife, 'F', during her lifetime, would be entitled to income realised from property - Whether gift of usufruct in favour of 'F' could not be said to be invalid under Mohammedan law merely because usufructs would come into existence in future - Held, yes - Whether, therefore, 'F' should be taken to have an interest in property which ceased on her death and a corresponding benefit created to accountable person on cesser of such interest - Held, yes FACTS 'S' executed a settlement deed dated 15-5-1950, under which he conveyed the property to his daughter, 'J', with absolute rights subject to a condition that the settlor during his lifetime, and, after his death, his second wife, 'F', during her lifetime would be entitled to the income realised from the property. 'S' subsequently died and later 'F' also died. 'J', the accountable person, filed the statements of accounts in respect of the properties that passed on death of 'F'. In the assessment proceedings, the accountable person contended that under the settlement deed dated 15-5-1950, she got an absolute right to the property in question and that the condition regarding payment of the income from the property to the settlor during his lifetime, and, after his death, to his wife, 'F', during her lifetime, was invalid and not binding upon her and, therefore, the deceased, 'F', did not get any interest in the…

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