Law:

Section:

I. Section 5, read with section 7 of the Estate Duty Act, 1953 - Property passing on death - Baronetcy Trust was created by Governor-General of India in Council to settle various properties to accompany and support title and dignity of a baronet - Whether where deceased-baronet enjoyed life interest in properties comprised in Baronetcy Trust as a holder of office, such life interest would not be assessable to estate duty, as it was not property which passed on death nor could be deemed to have passed on death by cesser of interest - Held, yes II. Section 10 of the Estate Duty Act, 1953 - Gifts whenever made where donor not entirely excluded - Whether where donor makes a gift of residential house to his wife and continues to reside there with her in his capacity as husband, value of such property could not be included in estate of deceased for estate duty - Held, yes FACTS-I The deceased was a baronet in succession. He was possessed of free estate. In terms of the will executed by the deceased, his wife was appointed as executor and trustee of the will. She filed the estate duty account of the deceased's estate. There was one settlement known as the Baronetcy Trust created under the Act No. XIX of 1911 by the Governor-General of India in Council. The preamble of that Act stated that the purpose of the Act was to settle various properties "to accompany and support the title and dignity of a baronet". Under section 4 of the said Act, the trustees held the baronetcy fund up to and for the benefit of the deceased or his male heirs shall, for the time being, have succeeded to, and be in the enjoyment of the title of baronet. The ACED was of the view that, in addition to the free estate, the properties comprised in the baronetcy trust were also liable to duty on the death of the deceased. Accordingly, he issued notices under section 55 to the trustees who took the stand that no charge to duty was attracted in respect of the trust properties. The ACED rejected the contentions and imposed charge of the estate duty on the principal value of the estate. On appeal, the Tribunal held that the deceased had transferred his life interest in properties comprised in the…

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