Law:

Section:

Section 10, read with sections 27 and 53 of the Estate Duty Act, 1953 - Gifts whenever made where donor not entirely excluded - In 1936, deceased by registered instrument transferred whole of his property to his son in consideration of certain annuity - In 1948, son died issueless leaving behind him, his widow (i.e. applicant) - In partition suit between applicant and deceased, applicant's claim for one-fourth share in property of her husband was decreed - Deceased died in 1956 - Whether applicant being legal heir of donee (i.e., deceased's son) was liable as an accountable person for estate duty to extent of 1/4 share in property that was inherited by her from her husband - Held, yes FACTS The deceased, by a registered document dated 11-9-1936 transferred, whole of his property to 'S', his son, in consideration of his services, obedience and love and affection and in further consideration of a sum of Rs. 10,000 per year till his lifetime. 'S' died issueless in the year 1948, leaving behind him his widow, 'the applicant'. After 'S's death, there was litigation between the applicant and the deceased for partition and separate possession of their respective shares in the property of 'S'. There was a preliminary decree of the civil court in the partition suit by which decree the claim of the applicant for one-fourth share in the said property was decreed. It was further declared that the maintenance allowance of Rs. 2,500 for the deceased, would be a charge on the share of the said property allotted to the applicant. The deceased died in 1956. Thereafter, assessment of the estate left by the deceased was taken up by the Assistant Controller, Estate Duty, who held that as the deceased had reserved the benefit to himself in the shape of annuity of Rs. 10,000 per annum for the period of his life, the transfer of the said property amounted to a gift covered by the provisions of section 7. He further held that the fact that the donee had pre-deceased the donor would not affect the liability which would pass on to the legal heir of the donee, namely, the applicant. He, therefore, considered the applicant as an accountable person liable for duty on her 1/4th share in the…

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