Law:

Section:

Section 22, read with section 7, of the Estate Duty Act, 1953 - Property held by deceased as trustee - Whether where deceased was trustee under disposition not made by him, trusteeship not involving any beneficial interest in property, trust property could not be deemed to be part of estate liable to duty - Held, yes - Whether where a person entrusts a sum of money to another for a specific purpose there would be valid trust and latter be trustee, an entry in trustee's account showing that monies belong to trust cannot be regarded as mere entry for his convenience - Held, yes FACTS One 'D' was the karta of a HUF consisting of himself and his son, 'J'. 'M', wife of 'D', died on 19-5-1945. Some time prior to her death, she appeared to have given a direction to her husband that a sum of Rs. 31,000, out of the amount of Rs. 75,000 standing to her credit in the family business accounts, should be set apart for the creation of a permanent trust for establishment and conducting a Sanskrit Patasala in her name. On 2-11-1948, an entry was made in the account books of the business by which a sum of Rs. 31,000 was taken out of the account standing in the name of 'M' and put under a trust account. The balance of the amount continued to remain in the name of 'M' as before. On 5-4-1951, 'D' executed a registered trust deed; 'J' signified his assent thereto by attesting the deed. 'D' died on 19-12-1953, leaving surviving him his son, 'J'. In respect of assessment to estate duty on the property belonging to 'D', a question arose whether the credit balance in favour of 'M' was part of the estate on which duty was leviable. The sum of Rs. 75,000 which originally stood in the name of 'M' was augmented periodically with interest thereon so that even after the appropriation of a sum of Rs. 31,000 in 1948 therefrom for the purpose of the trust, there remained a sum of Rs. 1,33,277 as a credit. The ACED was not satisfied that the sum represented by the credit entry really belonged to 'M' but he held that even assuming that it represented her stridhana property, 'J' who inherited it on her death should be held to have blended that amount along with the rest of the joint family…

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