LexCONTROLLER OF ESTATE DUTY, KARNATAKA, BANGALORE versus UMESH RUDRA
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CONTROLLER OF ESTATE DUTY,
KARNATAKA, BANGALORE
v.
UMESH RUDRA
January 15, 1979
[P. N. BHAGWATI, D. A. DESAI AND A. D. KosHAL, JJ.]
951
Estat~ Duty· Act, 1953, S.
10~ enjoyn1i>11t to tlic entire exclusion of t!ie
donor, applicabi(ity when liusband is donor.
The deceased gifted his residential property to his W'lfe, but continued to
live there with her.
On his death, while calculating the estate duty, the appel-
lant indudcd the \'alue of the residential prop~rty, in the principal value of the
estate, on the ground that the deceased continued to reside with the \Vifc, even
after the gift. Upholding the High Cornt's judgment, and rejecting the special
leave petition, the Court
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HELD : Stction 10 cannot be construed in a n1anner which \Yould require the
ln,sband who bas gifted residential house to the wife, to live Separately from her.
\\!hen the wife obtains possession of the house and remains in enjoyment of
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it, it cannot be said that the husband who resid,es with the wife, is, on that
account, in possession or enjoyment of the house so as to attract the appli-
cability of Section JO. [952 B-D)
Mrs. Shanis111n Nelrar Mansur \'. Controller of lrstate Duty,
West Blngal
il ITR 301 : Sunil Roy v. Controller of Estate Duty, Calcutta, 77 ITR 667;
Mohammad Blwi & Anr. v. Controller of Estate Duty,
A.P.,
69 ITR 770;
I'~
Kamla Pandt1foi v. Controller of Estate Duty, 105 JTR 531; approved.
Bibi Al11nedi IJc{lum v. Controller of Estate Duty, Cl.P .. 83 lTR 303, over-
ruled.
CIVIL APPEi.LATE JURTSDICTIO:< : Special Leave Petition (Civil)
No. 6311/78.
From the Judgment and Order dated 1-6-78 of the Karnataka
High Court at Bangalore in T.R.C. No. I /75.
R. N. Sac/1they and Miss A. Subhasluzi for the Petitioner.
The Order of the Court was delivered by
BHAGWATI, J. This petition for special leave to appeal against an
order of the High Court of Karnataka raises a qncstion of interpretation
of section 10 of the Estate Duty Act, 1953.
The deceased made
a
gift of his residential property to his wife on 27th November, 1957 and
on his death which occurred on 2nd August, 1963, the question arose
whether the value of the residential property was liable to be included in
the principal value of the estate passing on the death of the deceased nu-
der section 10. The argument of the Revenue was that even after the
gilt the deceased continued to reside with the wife and, therefore, it
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952
SUPREME COURT REPORTS
[1979) 2 s.c.R.
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could not be said that the wife retained possession and enjoyment of
the residential property to the entire exclusion of the deceased and
hence section I 0 was attracted. Now there can be no doubt that on a
proper interpretation of section 10, the donee must retain possession
and enjoyment of the property gifted to the entire exclusion cf the
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donor, in order to repel the applicability of that section. But we do
not see how in the present case it can at all be said that the wife did
not retain possession and enjoyment of the residential house to the ex-
clusion of the deceased, merely because the deceased in his capacity
as husband continued to reside with the wife.
Section I 0 cannot
possibly be construed in a manner which would require the husband
who has gifted residential house to the wife to live separately from
her, if he wants to escape from the mischief of that section. Such an
interpretation would subvert family life and social order and would
be contrary to morality and good sense. When the residential house
is gifted to the wife and she obtains possession and remains in enjoy-
ment of it, it cannot be said that the husband who resides with the
wife, as in a happy family life every husband would be expected to
do, is, on that account, in possession of the residential house or in
enjoyment of it.
It is the wife who is in possession and enjoyment
of the residential house and the husband, by reason of the marital ties,
continues to reside with the wife.
We do not think that section 10
would at all be attracted in such a case.
We fmd that this view has been taken by the Calcutta High Court in
Mrs. Sham.mm Nehar Mansur v. Controller of
Estate
Duty,
West
Bengal(') and Sunil Roy v. Controller of Estate Duty, Calcutta('), the
Andhra Pradesh High Court in Mohammed Bhai and a1wther v. Cont-
roller of Estate Duty, (3) the Madras High Court in Kam/a Panda/al v.
Controller of Estate Duty,(•) and the Karnataka HighExcerpt shown. Read the full judgment & AI analysis in Lexace.