Case: Collector Of Estate Duty Vs. M/S R. Kanakasabai And Ors

4. The facts of the case material for the purpose of deciding the question of law formulated above, as could be gathered from the case stated are as follows :One Ratnasabapathy Pillai was the owner of the properties with which we are concerned in this case. He died on February 5, 1959 leaving behind him his four sons, some grandsons wife and daughter who are the accountable persons. They furnished an account of the properties passing on the death of the deceased to the Deputy Controller of Estate Duty, Madras who was the assessing authority. The Deputy Controller did not accept the correctness of the return made by them. He added to the return made, the value of the following properties settled by the deceased on his wife, sons, grandsons and daughter.By the deeds in question the deceased settled the properties in favour of the beneficiaries absolutely and with full power of alienation. The deeds in favour of his sons and the minor grandsons contained a provision as under:"You have topay me during my lifetime a sum of Rs. 1000/- per year for my domestic expenses."The deed in favour of the daughter contained amaintain myself and my wife during our lifetime."The deed in favour of the wife contained the following words :"In the hope that you will support me during my lifetime, I do hereby settle.........The Deputy Controller held that the deceased had reserved to himself an interest for life in the properties comprised in the above settlements, within the meaning of S. 12 of the Act. He accordingly included the value of those properties for the purpose of determining the value of the properties that passed on the death of the deceased. The accountable persons appealed to the Central Board of Direct Taxes, New Delhi. They contended before the Board that the conditions or stipulations contained in the deeds of settlement in favour of the sons, minor grandsons and daughter merely amounted to an expression of a desire and hence could not be interpreted as a reservation within the meaning of S. 12 as those conditions or stipulations did not detract from the absolute character of the settlements. With regard to the settlement made in favour of the wife, it was argued before the Board that the deceased had expressed only a hope that his wife would support him and maintain him during his life time, and the words used in the deed were vague and unenforceable in law as a stipulation. The Board rejected these contentions. It opined that the main point in issue in the case was whether an interest in the property was reserved by the deceased. It held that all the settlements fell within the scope of S. 12 or at any rate it came within S. 10 of the Act. Thereafter at the instance of the accountable persons, the question set out earlier was referred to the High Court.7. We have earlier set out the answer given by the High Court. The High Court held that S. 12 was wholly inapplicable to the facts of the case and the case has to be considered only under Section 10. Even under that section, the High Court opined, the entire value of the property settled on the various beneficiaries cannot be taken into consideration. All that can be taken into consideration is the value of the interest reserved by the deceased to himself during his lifetime. Further it held that the value of the properties settled on the wife of the deceased should be wholly excluded from consideration as the expression of a wish that his wife should support him during his lifetime did not amount to retention of any benefit in the property settled. On behalf of the Revenue, the conclusion reached by the High Court was challenged.

Reasoning:
Before considering whether Ss. 10 and 12 or either of them is applicable to the facts of the case, it is necessary to mention that in respect of the amount made payable by the sons and grandsons to the deceased, no charge on the property settled was created. Similarly no charge was created on the property settled on the daughter in respect of her liability to maintain her father and mother. So far as the stipulation contained in the deed in favour of the wife of the deceased, it was merely a hope and expectation and no enforceable liability as such was created. Hence we are in agreement with the High Court that no part of the property settled on the wife of the deceased can be taken into consideration in computing the value of the property that passed on the death of the deceased. We are also in agreement with the High Court that S. 12 is wholly inapplicable to the facts of the case.So far as the applicability of S. 12 (1) is concerned, it is nobodys case that the beneficiaries became entitled to the properties settled on them after the death of the deceased. There is no support for the contention of the Revenue that an interest in the properties settled was reserved to the deceased during his lifetime or for any period after the properties were settled; nor is there any provision in the deeds enabling the deceased to reclaim the property or its possession under any circumstance. None of the conditions laid down in Section 12 (1) are attracted to the provisions contained in the deeds ofa taxing provision is ambiguous and is reasonably capable of more than one interpretation, that interpretation which is beneficial to the subject must be adopted. This is a well accepted rule of construction. It is impermissible for the Court to read into a taxing provision any words which are not there or exclude words which are there. The words found in the provision must be given their natural meaning. In Da Costas case, this Court opined that there are only two parts to the section. We have set out those parts earlier. The contention of the Revenue runs counter to the reasoning adopted in Da Costas case. The contention advanced on behalf of the assessee finds support from some of the observations found in Da Costas case. The provisions for annual payments and maintenance made in the deeds as seen earlier are not charged on the properties settled. Hence the deceased cannot be said to have retained any interest in the properties settled. Therefore it cannot be said that he retained any benefit either in the properties settled or in respect of their possession.12. Hence in our opinion the facts of case do not come within the scope of S. 10. We, accordingly, allow the appeal of the assessee and hold that the value of the properties gifted or any part thereof is not liable to be included in computing the value of the estate that passed on the death of the deceased. In this view, it is not necessary for us to consider the meaning of the word "extent" found in S. 10. The decision of the Andhra Pradesh High Court in Mohammed Bhai v. Controller of Estate Duty, Andhra Pradesh, (1968) 69 ITR 770 (Andh Pra) rendered by one of us (Reddy J.) does not bear on the question of law that we have decided.