Law:

Section:

Section 11, read with sections 7 and 24 of the Estate Duty Act, 1953 - Limited interests disposed of within a certain period before death - Whether interest of life tenant can get determined otherwise than by any voluntary act on his part and even then case would be covered by section 11(1) - Held, yes - By virtue of a settlement deed Maharaja of Baroda settled 1/3rd share of income of trust created by him on deceased - Due to subsequent statutory enactment by State, deceased's said life interest came to end with effect from 31-3-1957 and corpus became liable to be distributed amongst other named beneficiaries - Notwithstanding this position, even after 31-3-1957, 1/3rd share in income of corpus was actually paid to deceased till her death - Whether section 11(1) was attracted to facts of instant case as a result of which value of 1/3rd share of trust property was liable to be charged to estate duty under that provision - Held, yes - Whether since in law deceased had no interest left whatsoever and she was not entitled to any income on and after 31-3-1957, therefore, section 7 was not applicable - Held, yes - Whether mere fact that upon cesser of interest of deceased income and corpus upon distribution had gone to settlor's son who happened to be ruler of gadi did not mean that reverter was to be settlor and, therefore, section 24(1) was also not attracted - Held, yes FACTS By a deed of settlement, Maharaja of Baroda, created a trust called "Royal Family Trust". By a subsequent deed of variation, the settlor directed the trustees to hold in trust absolutely 1/4th part of the trust funds for the person "who shall, on the death of the settlor, succeed to the gadi of the Gaekwards" and to hold the balance for the other specified purposes and trusts. On the very date, but in point of time prior to the foresaid deed of variation an enactment called "The Royal Family Trust Act" was passed. All the deeds, including the alterations formed part of that enactment. Accordingly, under the deed and the enactment the share of the Maharani (deceased) in the income of the reduced funds became 1/3 and she was in receipt of such income till her death. The settlor died in 1939,…

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