COLLECTOR OF ESTATE DUTY versus M/S R. KANAKASABAI AND ORS.

Citation: [1973] 3 S.C.R. 747 · Decided: 16-03-1973 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Disposed off

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Judgment (excerpt)

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747 
COLLECTOR OF ESTATE DUTY 
v. 
MIS R. KANAKASABAI AND ORS. 
March 16, 1973 
(K. S. HEGDE, P. )AGANMOHAN Rl!DDY AND H. R, KHANNA, JJ.) 
Estaie Duty Act, 1953 ss. 10 and 12-Applicability of. 
R dies in 1959 leaving behind him four sops, some grandsons, wife 
and daughter. 
These accountable persons furnished an account of the 
properties passing on the death di R to the Deputy Controller of Estate 
Duty. 
The Deputy Controller added to the return made the value of 
certain properties settled by the deoeased on his wife, sons, grandsons and 
daughter on the ground 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 Estate Duty Act 1953. 
The deed in favour 
of the sons and the minor grandsons contained a R'rovision to the effect 
that these would have to pay to the deceased during his lifetime a sum 
of Rs. 1,000/. a year for his domestic expenses; the deed in favour of 
the daughter contained a Provision that she would have to maintain him 
and bi.s wife for their lifetime; the deed in favour of the wife expressed 
a hope that she would support him in his lifetime. 
In al'peal the Cen-
tral ·Board of Direct Taxes held that the settlements fell within the scope 
of s. 12 or at any rate ~t s. JO of the Act. The High Court in refer-
ence held (I) thats. 12 was wholly inapplicable to the facts of the cue; 
(ii) that even ·under s. IQ, !IOI the entir~_yalue of the property settled on 
the various beneficiaries but only the value of the interest reserved by the 
deceased to himself during his life time could he taken into consideration : 
(iii) that the deed in favour of the wife did not reserve any benefit in 
favour of the dtoceased as it expressed only a hope. The Revenue as well 
as the asmsees appealed to thIS Court. 
Allowing the appeal of the assessees, 
HELD : (i) So far as the stipulation contained in the deed in favour 
of the wife of the deceased was concerned it was merely a hope and ex-
pectation and no enforceable liability as such was created. The High Court 
was therefore right in holding that no part of the property ~tied on the 
wife of the deceased could be taken into consideration in computing the 
value of the property that passed on the death of the dOC<Oased. [751A-Bl 
(ii) The High Court was further right in holding that s. 12 was wholly 
inapplicable to the facts of the case. It wls n(!body's oase that the bene-
ficiaries became entitled to the properties settled on them after the death 
of the deceased. 
There was no support for the contention of the Revenue 
that an interest in the propei-ties settled was reserved to the 
deceased 
during his lifetime or fur any period after the properties were settled; nor 
was. there any provision in the deeds enabling the deceased to reclaim the 
property or its possession under any circumstances. 
None of the condi-
tions laid down in s. 12(1) were attracted to the provisions contained in 
the deeds of settlement. 
(7510-FJ 
(iii) lhe facts of the case also did not come within the scope of s. IO, 
The provisions for ..,niml payments and maintenance made in the deed• 
were not cha;ged on the prol'°rties settled. Hence the deceased could . not 
he said to have retained any mterest in tne pro,P;rties settled. Therefore it 
could not be said that he retained any benefit either in the properties settl-
ed or in respect of their possession. !7S4 A-BJ 
748 
SUPREME COURT REPORTS 
[1973] 3 S.C.R. 
If, as contended by the Revenue, the expression "of any benefit to him 
by contract or otherwise" in s. 10 mean any benefit under the gift, the 
legislature should have said so. 
There was no difficulty in saying so. It 
is a well accepted rule of construction that if a taxing prgvision i& ambi-
guous and is reasonably capable of more than one interpretation, that in-
terpretation which ·is beneficial to . the subjecl must be adopted. 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 provisiop must be given their natural meaning. 
[753F-Gl 
George De Costa v. Controller of Estate Duty Mysore, 51 I.T.R. 497, 
considered and applied. 
Mohammad Bhai and Anr. v. Controller of Estate Duty, Andhra Pra-
desh, 69 I.T.R. 770, held inapplicable. 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1770 
of 1970 and 474 1973. 
· 
Appeals by special leave

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