ORDER
Per Shri S. P. Kapur, Judicial Member - The revenue appeals and following substantive ground has been raised before the Income-tax Appellate Tribunal :-
On the facts and in the circumstances of the case and in law, the learned Controller of Estate Duty (Appeals) XVIII erred in holding that the deceased should be treated as domiciled in USA and not in India as held by the Asstt. Controller of Estate Duty.
2. Qua the above ground, the feed back of the facts and the stand of the revenue are reflected in the reasoning of the assessing Officer, which reads as under :-
'As regards foreign assets of the deceased, the representative of the AP has contended that since the deceased was not domiciled in India, the foreign assets are not taxable. He has filed a letter dt. 26-12-1983 stating that the deceased had an Indian domicile. However, he wanted to migrage and settle down in USA. He had also submitted a note dt. 24-2-1978 from Shri S. P. Mehta regarding the domicile of the deceased. Shri S. P. Mehta has stated that the deceased Shri Nanavati had an Indian domicile. It appeals that he wanted to migrate and settled down in USA. For that he has made an application for naturalisation some time in 1974 to which the appropriate authority by his reply dated 20-6-1974 had informed him that he was not eligible for naturalisation for the reason mentioned in that reply. According to the reply, Mr. Nanavati would have been eligible to file application for naturallsaion after 4 years plus 1 day after his return to USA. In these circumstances, he could not emigrate to USA. The question for consideration is whether he has ceased to be of Indian domicile. He has further stated that Shri Nanavati wanted to acquire American citizensip which is obvious from application and the reply. Before he could acquire the citizenship of America it apperas he has to reside in America for a certain period. In other words, he has to stay in America for a certain period with the intention of making it his permanent home. The fact that he has been doing so is obvious. Accordingly it should be argued that even though Mr. Nanavati did not acquire American citizenship by his conduct he had been residing in America with an intention to make it his permanent home and therefore he has by choice acquired another domicile.'
After completion of his education in USA, it is seen, that in 1971 Shri Nanavati came to India and stayed here for 3 years. Thereafter he left for Paris on IBM assignments. Because of his assignment it is seen that he had to stay in Paris. France and USA and hence there was no continuous stay in USA as required by the authority for granting him citizenship of USA. Shri S. P. Mehta and Shri Vasvada have clearly mentioned in their respective notes that Shri Nanavati had an Indian domicile and that it apperas that he wanted to marguerite and settle down in USA.
A man acquires a new domicile by taking us his fixed habitation in a country which is not that of his origin. Acquiring of a new domicile depends chiefly upon the intention of the person to take up his fixed habitation in a new country and stay in such country on account of service would not be sufficient to inter a change of domicile. The fact that the person having given up his domicile of origin and rides in a new country should be established. If a person goes abroad because of his service from place to place the change of domicile of origin should not be inferred. Even if a person in USA holding a Green Card it cannot be said that he has taken a final decision of settling down in USA. Holding of a Green Card does not change the citizenship of a person. In the present case it is seen that even though the deceased was stating in USA he used to visit India for about 3-4 weeks every year up to his date of death. He has his HUF property in India. At the same time it is seen that the deceased has not purchased any immovable property in USA. Had he purchased any such immovable property that too would have been one of the good evidence to prove the intention of the deceased to settle permanently in USA. Before taking a final decision that the man has given up his domicile of origin, it is necessary to establish that the person has acquired domicile of some other country. In the present case it is seen that the deceased had spent his time travailing from place to place on account of his service and that he has not permanently settled down in any particular country. In the circumstances there was every possibility that the deceased would have also taken decision to come back to India after some time.
The mere fact that the deceased was out of India and was having his service over there would not lead to the inference that he had acquired a domicile of choice in USA. It is a settled position in law that the ties which bind a person to the country of his domicile of origin are extremely strong and that there must be congent and reliable evidence to show that he intended to settle in some other country before he could be said to have given up his domicile of origin.
From the facts stated hereabove I am of the opinion that the deceased was an Indian domicile as stated by Shri Vasavada in his letter dt. 26-12-1983 and that all his Indian and foreign assets should be taxed accordingly as per provisions of the Estate Duty Act.'
The learned first appellate authority decided the issue in favour of the accountable person and his reasoning which is a very licid and detailed one, based on cogent reasoning, is to the following effect :-
'(2) I have carefully considered the facts of record. While some of the points considered by the ACED like non-acquisition of immovable property in USA are relevant to the issue of deciding whether or not the deceased had an intention to acquire the domicile in another country, the ACED should have considered the preponderance of evidence in this case, pointing to a definite decision taken by the deceased to domicile in USA by the act of applying for US citizenship. The commentaries on the Indian Succession Act are very clear in stating that even a few hours stay in a foreign country is sufficient to establish change of the domicile if the residence is a sequel to clear intention to stay there permanently in future. In this case the deceased had his moorings in USA. He had studied in USA taken a degree in computer since in USA and had take up employment with the Giant multi national corpn. IBM. He had taken green card when he was residing in USA. He did not surrender it when he left USA on transfer to other international branches of IBM. When his two sons were born in USA he had an option to apply for either Indian citizenship or US citizenship for the two sons. He chose to apply for US citizenship for the two children. The fact that he made an application in 1974 for US citizenship proved that wherever might be working in connection with his IBM job he had determined to become as US citizen and stay there permanently in future. The deceased was a heart patient and from the correspondences with his friends it would appear that the deceased had planned to go back to USA and settle down so that he could have the best medical attention for his ailment. It is pertinent to note that the deceased expired in Paris on accounts of his heart ailment at the very young age of 35. The point to be decided in this case is whether or not the deceased had decided to give up Indian domicile and to acquire a new domicile in USA. Section 10 of the Indian Succession Act clearly says that man can acquire a new domicile by taking up a fixed habitation in a country. The explanation below the section says that a man is not to be deemed to have taken up his fixed habitat in INDIA merely by reason of residing there in the civil, military, naval or air force service Govt. or in the exercise of any profession of calling. The ACED is right is saying that more residence abroad on employment cannot by itself be a proof of change of domicile. The presumption of law is always against change of domicile. In my opinion, the ACED has omitted to take into account one material fact. The ACED has decided the issues by taking into account the facts obtaining just prior to the death of the deceased. In my opinion, what is relevant to be decided is not only whether the deceased and chosen to change his domicile but also when. In other words whether the deceased had at any point of time, not necessarily in the last few yes of his life, decided to stay permanently in the last few years of his life, decided to stay permanently in USA. If there was a clear change of domicile in an earlier year, then by mere reason of transfer of IBM assignment to some other country in the course of the employment in USA, will not result in change of domicile from USA to a third country which can gain include India. In this case, the claim made is not that the deceased had chosen to have his domicile in France. The claim is that he had chosen to change his domicile to USA. The first question to be decided is the acceptability of a claim, if it is claimed that boy of 14, who went to the state in 1956 and stayed there for his studies and employment till 1970, was married and was having children there, had, during the period of 14 years stay there chosen to change his domicile to the USA. If there are evidence to show that he had made a final choice of permanent resident there at that time then the subsequent travels to India or France on service will not alter the fact of having acquired an American Domicile at that time. This precisely what has happened in this case. Not only the boy acquired an Amercial domicile long before his death, but had also applied for US citizenship long ago. The evidences are clear to show that the deceased had made a definite choice of permanent residence in USA and domicile in USA. If the domicile had at that early part of his life changed from India to USA then the annual visits to India or the 3 years postings in India or France will not alter the fact that the domicile of the deceased was in USA till 1976 and wherein his two sons had citizenship. The change of domicile was long before the death of the deceased and this issued should not be clouded by subsequent transfers or annual visits to India which were not to meet his parents at all as they were there in USA right up 1976 but only to meet his other relatives and friends (and such meetings are not prohibited for a person who has changed his domicile). The ground is allowed.'
3. Before us the learned departmental representative has placed strong reliance on sections 8, 9 and 10 of the Indian Succession Act. In fact, he has placed on our file photostat copies of pages 25-26 from a commentary on The Indian Succession Act by P. L. Poruck. According to the learned departmental representative, the domicile of origin prevails until a new domicile has been acquired. He has strongly relied upon an example, which he has placed on our file reading as under :-
'A born of British parents in England in 1854, came to India in 1880 to serve as a missionary and except for visits to England on leave for 6 months in 1888, 1894, 1901, 1907, 1911, 1914 and 1920 he lived in Calcutta continuously for 52 years until his death in 1933. By his will he made certain bequests to religious and charitable uses which would be void under section 118 if his domicile was Indian at the time of his death. Held that the testator had an Indian domicile by choice and was governed by the Act and the bequest was void (n).'
On his part, the learned authorised representative of the accountable person, Shri S. P. Mehta, while supporting the impugned order of the learned first appellate authority has contended that a domicile has to be gathered from circumstances and the intention of the deceased and it is not anything which can be considered on hypothetical grounds.
4. Having given our anxious thoughts to the submissions made before us as also to the reasoning of the learned lower authorities, we are of the considered opinion and do hold accordingly that the impugned order of learned first appellate authority warrants no interference at our leave since it is based on proper appreciation of facts and law.
5. Domicile connotes voluntarily fixed habitation. The place in which a person has a fixed permanent house. A mans first domicile is that of his origin which depends on his father. When he attains majority he can make a domicile of choice and is held to be domiciled when the resides, if he intends to remain there, making it his house. On giving up a domicile of choice, a man reverts to his domicile of origin until he has acquired another domicile of choice.
In the case of State v. Narayanadas Mangilal Dayame : AIR1958Bom68 , their Lordships of the Honble jurisdictional High Court have defined domicile in the following terms :-
Domicile is an expression which has certain implications in International Law. Domicile means residence by choice with the intention of the residence being permanent in a particular country.
In the case of B. Chaudhary v. State of Bhopal AIR 1951 Bho 1, domicile has been defined as under :-
Domicile is the place of abode or, generally speaking, the place where he has his permanent home. What is properly the domicile of a person is that place where he has voluntarily fixed his abode, not for a mere special or temporary purpose, but with a present intention of making it his permanent home.
Instances-examples-appended as (i) and (ii) to Section 10 of the Indian Succession Act (which has been relied upon by the learned departmental representative before us also) are to the following effect :-
'(i) A, whose domicile of origin is in England, proceeds to India, where he settles as barrister or a merchant, intending to reside there during the remainder of his life. His domicile is now in India.
(ii) A, whose domicile is in England, goes to Austria, and enters the Austrian service, intending to remain in that service. A has acquired a domicile in Austria.
Domicile vis-a-vis estate duty and section 3(1) (d) of the Estate Duty Act has been commented upon it the following terms by the same author - P. L. Paruck-in the commentary on The Indian Succession Act :-
'Domicile and Estate Duty. Under section 3(1) (d) of the Estate Duty Act, XXXIV of 1953, the domicile of a person shall be determined as if the provisions of this Act on the subject applied to him. Section 21 of the Estate Duty Act provides that there shall not be included in the property passing on the death of the deceased :
(a) immovable property outside the territories to which the Estate Duty Act extends, i.e., immovable properties situate in foreign countries whether the deceased had Indian domicile or foreign domicile.
(b) Movable property outside the territories to which the Estate Duty Act extends at the time of the death unless in the case of any property whether settled or not, the deceased was domiciled in the said territories at the time of his death, i.e. all movables outside India if the deceased was not India. But if the decease had Indian domicile all his movable property outside India is liable to Estate Duty. The Indian Legislature has in this respect adopted the same principle as is applied in the United Kingdom (see Phillips on Prabate-Duty, 5th Edn. Page 322).
Distinction between Nationality and Domicile. Under the Indian Citizenship Act of 1955 (Act 57 of 1955) citizen means in relation to a country specified in the first schedule (to that Act) a person who under the citizenship or national law for the time being in force in that country is a citizen or national of that country. Domicile denotes the relation between a person and a particular territorial unit possessing its own system of law. It determines his personal status and the law applicable to him in matters such as majority or minority, marriage, divorce, and succession. Nationality or citizenship does not concern itself with these matters. It relates to the acquisition or renuciation of the citizen owing allegiance to one country wanting to acquire a new citizenship in another country. For such acquisition different countries have laid down various conditions to be fulfilled before admitting a person of one nationality in the country to acquire a new nationality in another country, one of such conditions being the oath of allegiance. A person can have only one nationality in one country; but in case of domicile, law recognises separate domicile of each territory or apart of a state which have a uniform system of law. All persons in a territorial unit with a single system of law have the domicile of that territory and where a state has more than one system of law there may be a separate domicile of each part of the state with a uniform system of law. Thus in the United States of America State domicile is universally recognised.'
Now, on the facts and in the circumstances of the case with which we are seized of, the intention to reside permanently in the United States of America is implicit and has been expressed in clear terms by the deceased when he filed an application for naturalisation. Granted that the deceased made the application prematurely and that is what has was told by the concerned authorities but this will not go against the deceased to disprove his intention but it proves that he was more than interested to settle in the United State of America and he was in a haste to have that status and accordingly the intention becomes more explicit and clear about the domicile. In the face of any evidence to the contrary the issue has got to be decided in favour of the accountable person. The deceased was not domiciled in India. That is our finding.
6. Lastly, we will have the desired fortification from the decision of the Supreme Court in the case of Central Bank of India Ltd. v. Ram Narain : 1955CriLJ152 , their Lordship having observed that the concept of domicile is not uniform throughout the world not is the terms domicile capable of exact definition. It lends itself to illustrations but not to definition. A residence of a particular kind and an intention of a particular kind are constituent elements for existence of domicile. Thus both factum and animus must be co-existent. The intention must be a present intention to reside for ever in the country.
In the case of the deceased, there cannot be two opinions that his intention to reside in the United State of America was where and will leave it at that.
The impugned order stands upheld. The appeal fails.