Controller of Estate Duty, Karnataka, Bangalore v. Umesh Rudra

951 CONTROLLER OF ESTATE DUTY, KARNATAKA, BANGALORE _v._ UMESH RUDRA _January_ 15, 1979 [P. N. BHAGWATI, D. A. DESAI AND A. D. KosHAL, JJ.] 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 appellant 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 ### c # • #### • 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 D" 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 applicability 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, overruled. 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 nuder section 10. The argument of the Revenue was that even after the gilt the deceased continued to reside with the wife and, therefore, it II! 952 SUPREME COURT REPORTS [1979) 2 s.c.R. ;\ 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 ## ' # • • • **B** **·D** E F G 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 exclusion 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 enjoyment 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 High Court in the judgment under appeal and it commends itself to us. We think that these High Courts rightly refused to apply section 10 to a case like the present where the hu.sband has gifted the residential house to the wife and thereafter continued to reside with the wifo in the residential house. The contrary view taken by the Allahabad High Court in _Bibi Ahmedi_ _Begum_ v. _Controller of Estate Duty,_ _U.P._ (') must be held to be **erroneous.** We accordingly reject the special leave petition. M. R. _Petition dismissed._ (I) 71 I.T.R. 301 (2) 77 I.T.R. 667. \ 11 _69_ J.T. R. 770. (4' 1051.T.R •. IJJ, ~S 8'3 **IT.R,** _Jn3_