Divan, J.
1. In this Reference madeat the instance of the accountable person by the Central Board of Direct Taxes under Section 64(1) of the Estate Duty Act, 1953, (hereinafter referred to as the Act), the following question has been referred to us:--
'Whether, on the facts and in the circumstances of the case, the sum of Rs. 1,75,000/- representing the value of five immovable properties gifted by the deceased to his five sons by five Gift Deeds, dated the 25th September 1951, has been correctly included in the principal value of the estate of the deceased under the provisions of Sections 10 and 12 of the Estate Duty Act, 1953.'
This Reference arises out of the estate duty assessment pertaining to the estate of Haji Samsuddin Rajabali. who died on June 30, 1954. Prior to his death, the deceased had executed five Gift Deeds, all dated September 25, 1951: and by each Gift Deed he gifted different immoveable properties mentioned in the relevant Gift Deed to each of his five sons. At the time of these gifts, three of the sons were minors and in their cases, the gifts were accepted by the mother as the guardian of the three minor sons. The major sons themselves accepted thegifts on their own behalf. In each of the five Gift Deeds certain conditions were laid down by the deceased. Two of the three minor sons, Badruddin and Shabuddin, were required to bear the maintenance expenses of the mother in equal shares. The third minor son Rajabali was required to bear the maintenance, education and marriage expenses of his sister Masifa. Kikabnai and Sadaqali were required to bear the maintenance, education and marriage expenses of two other daughters of the deceased. In addition, the eider son Kikabhai was also required to allow the deceased to continue to carry on his business in one of the buildings, which Kikabhai received under the Gift Deed in his favour.
2. After the death of the deceased, while computing the principal value of the estate left by the deceased, the Assistant Controller included a sum of Rs. 1,75,000/- as the value of the different properties included in the said five Gift Deeds; and for this purpose he invoked the provisions of Section 12 of the Act. Against this decision, there was an appeal to the Central Board and the Board held that the provisions of Section 12 were applicable and it further held that there was an alternate liability in this case under Section 10 of the Act. since the deceased had continued to derive benefits directly attributable to the five Gift Deeds by reason of the fact that he was relieved of his liability to boar the maintrnan''' and other expenses because of the conditions laid down in the Gift Deeds. Thereafter at the instance of the accountable person, the above question has been referred to us by the Central Board.
3. The five Gift Deeds have been annexed to the Reference and it would be better to reproduce the relevant portions from the Gift Deed in favour of Kikabhai, the major son.
In the Gift Deed in Kikabhai's favour, after gifting the three properties, it is stated:--
'The three houses of the above description measurements boundaries with its land structure, water and electric fittings, latrines with all rights of ventilation and open air are hereby gifted to you permanently with all the rights, titles and interests in the said properties and the possession whereof is delivered to you in pursuance of this gift and thereby you are now entitled to manage or transfer the said properties and that there will not be any dispute regarding any title, claim or interest in the said properties by me or by my heirs subject to the following conditions:
XX XX XX XX This gift is further subjected to a condition that there is a Hardware shop in the name of Haji Samsudin RajabaliLokhandwala owned by me on the ground floor of the house stated in para 1 above and that the said shop is to be continued there and there permanently and that you are debarred from shifting the said shop to any other place. However, the house portion in which the said shop is running is now owned by you.
That you will have to bear the maintenance, education and marriage expenses of your minor sister Zarabu Samsuddin, aged 15 years and that such expenses will have to be borne by you till the time she is married and till she departs from after marriage for joining the new place of her marriage. That you are entitled to enjoy and manage these properties at your sweet will subject to your responsibility in fulfilling the conditions stated above.' In the remaining four Gift deeds, the provision for the maintenance, of education and marriage expenses of the other daughters of the donor is mentioned in exactly the same language as the passage we have cited above from the Gift Deed in Kikabhai's favour; and so far as the wife of the donor, Sultanbu, is concerned, in the case of two minor sons, the condition was that they had to bear the appropriate expenses for their mother Sultanbu till she survived; and each of the five gift deeds makes it abundantly clear that the gift deeds were being executed subject to these conditions in favour of the persons concerned.
4. Under the Mohamedan Law, a gift with a condition is recognized and it has been stated in Mulla, Principles of Mahomedan Law, 16th Edn. at page 155, Section 164, that when a gift is made subject to a condition which derogates from the completeness of the grant, the condition is void, and the gift will take effect as if no conditions were attached to it. It has also been stated at page 157, Section 165: 'Where property is transferred by way of gift, and the donor does not reserve dominion over the corpus of the property nor any share or dominion over the corpus, but stipulates simply for and obtains a right to the recurring income during his life, the gift and the stipulation are both valid. Such a stipulation is not void, as it does not provide for a return of any part of the corpus as in Section 164. The stipulation may also be enforced as an agreement raising a trust and constituting a valid obligation to make a return of the proceeds during the time stipulated. It was so held by the Privy Council in Nawab Umjad Ally v. Mohumdee Begum, (1867) 11 Moo Ind. App 517 which was & Shia case and in Mohammad Abdul Ghani Khan v. Fakhr Jahan Begam, 49 Ind App 195 : AIR 1922 PC 281 which was a Sunni case.
The principle of the above decision has been extended by the Courts in India to cases where a gift is made subject tothe condition that the donee shall pay the income to a person or persons nominated by the donor during the life of such person or persons.'
5. In Tavakalbhai v. Imatiyaj Begum, : AIR1916Bom104 it was held that where A makes a gift of certain property to her son B with a condition that B should pay out of the income thereof Rs. 40/- every year to C, during C's lifetime and divide the remaining income equally between him and D during D's life, both the gift and the condition are valid; and B is bound to pay Rs. 40/- per annum to C and divide the remaining income equally between himself and D until D's death. This case was a Sunni case. In Lali Jan v. Muhammad, (1912) ILR 34 All 478, a Sunni case, the Allahabad High Court held that where A makes a gift of his house to his son B with a condition that D should give the income of one-third of the house to A's grandson C during C's life, both the gift and the condition are valid, and D is bound to pay the income to C during C's life time. It is, therefore clear that in the light of these passages from Mulla and the decisions referred to above that in the instant case the conditions imposed for the maintenance of the wife of the donor and for the maintenance, education and marriage expenses of the daughters of the donor were valid conditions and, therefore, the question that we have to consider is as to the effect of the provisions made for maintenance in each of these five gift deeds.
6. As regards the Gift Deed In favour of Kikabhai one more condition has been imposed by the Gift Deed viz., that Kikabhai should allow the shop to be run on the ground-floor of one of the properties indicated in the Gift Deed in favour of Kikabhai. By this condition it cannot be said that there is any derogation from the completeness of the grant because the donor did not reserve any dominion over the corpus of the property nor did he reserve any power over the dominion of the corpus but only stipulated that the shop should be allowed to run on the premises where it had been running in the past. Under these circumstances that particular condition in the Gift Deed in Kikabhai's favour is a valid condition.
7. The question then arises whether under any of the provisions of the Act, the immoveable properties included in these different Gift Deeds can be said to have passed on the death of the deceased or can be said to be deemed to have so passed under any of the provisions of the Act.
8. Regarding the condition of the user of the shop in the Gift Deed in favour ofKikabhai, at the first blush it may appear that by the condition regarding the user of the ground floor premises for the purpose of the shop, the donor was not entirely excluded from possession and enjoyment of this particular property under the gift deed and, therefore, the provisions of Section 10 of the Act would be attracted. But it has to be borne in mind that there must be a passing of the property on the death of the settlor either under the provisions of Section 5 or under the deeming provisions of Section 10 of the Act. So far as this right to conduct the shop on the ground floor of the property gifted to Kikabhai is concerned, it has to be borne in mind that there is an obligation on Kikabhai to allow the shop in the name of Haji Samsuddin Rajabali Lokhandwala to be continued in those premises permanently and Kikabhai is debarred from shifting the said shop to any other place. Thus even after the death of the deceased, the shop must be allowed to be continued in those very premises and there is no passing of the property regarding this particular shop premises. Even after the death of the donor, the heirs of the donor are entitled to continue the shop in those very premises permanently i. e. so long as the business is continued; and that being the case, it is difficult to accept the contention of the Revenue that there was any passing of the property, either actual or deemed, on the death of the deceased so far as the user of this particular shop premises is concerned. The user is not to come to an end on the death of the deceased and hence the passing of the property, which is an essential element in exigibility of any property to the estate duty is absent so far as this particular shop premises are concerned.
9. As regards the provisions made in each of the five Gift Deeds for the maintenance of the daughters and the wife, it is clear that under the provisions of Mahomedan Law, the donor was under an obligation to maintain his wife and daughters. It has been stated in Mulla's Principles of Mahomedan Law, 16th Edn. at page 268, Section 277, that the husband is bound to maintain his wife (unless she is too young for matrimonial intercourse) so long as she is faithful to him and obeys his reasonable orders. But he is not bound to maintain a wife who refuses herself to him, or is otherwise disobedient, unless the refusal or disobedience is justified by non-payment of prompt donor, or she leaves the husband's house on account of his cruelty. Similarly, it has been stated in the same book at page 338, Section 370. that a father is bound to maintain his sons until they have attained the age of puberty. He is also bound to maintain his daughters until they are married. Section 370 occurs in ChapterXIX, which deals with maintenance of relatives and Section 369 defines maintenance to include food, raiment and lodging. Maintenance of wife is also included in this Chapter but Section 365 indicates that this topic has been dealt with under Sections 277 to 279. Thus so far. as the principles of Mahomedan Law are concerned, maintenance to be provided is in respect of food, raiment and lodging. Unlike the provisions contained in Hindu Law under which a Hindu father is bound to maintain from the joint family property his unmarried daughters till their marriage and also to provide for their marriage expenses, there does not appear to be any provision under the Mahomedan Law under which there is an obligation on the father to provide for the marriage expenses of the daughter. Similarly there does not appear 'to be any obligation on the father to provide for the expenses for the education of the minor daughters. The only obligation laid down under the Mahomedan Law is to provide for the maintenance, which includes food, raiment and lodging for the unmarried daughters till they get married and for the wife. It Is clear, therefore, that by making these provisions in each of the five Gift Deeds for the maintenance of his wife Sultanbu and for the maintenance till marriage of the 3 unmarried daughters, the donor in each of the five cases was passing on his own obligation to the donee concerned. In Tavakalbhai's case, ILR 41 Bom 372: AIR 1916 Bom 104 (Supra) the right of the person for whose benefit such a condition has been imposed under a Deed of Gift, to file a suit for the enforcement of the condition was recognised and hence it is clear that in the instant case also the unmarried daughters and the mother could have enforced the conditions meant for their benefit against the donee concerned. Thus, it is clear that by making this provision, the donor reserved to himself a benefit under the contract so far as the property gifted by him was concerned in each of the five cases, inasmuch as he got rid of the obligation to provide maintenance for his wife and unmarried daughters,
10. The question then arises as to whether these conditions providing for the. maintenance of the wife and the unmarried daughters brings the case either under Section 10 or Section 12 of the Act. Section 12 of the Act provides as follows:--
'12. (1) Property passing under any settlement made by the deceased by deed or any other instrument not taking effect as a will whereby an interest in such property for life or any other period determinable by reference to death is reserved either expressly or by implication to the settlor or whereby the settlor may have reserved to himself theright by the exercise of any power, to restore to himself or to reclaim the absolute interest in such property shall be deemed to pass on the settlor's death:
* * * * * Explanation -- A settlor reserving an Interest in the settled property for the maintenance of himself and any of his relatives (as defined in Section 27) shall be deemed to reserve an interest for himself within the meaning of this section.'
Thus, it is clear that the term 'relatives' is to be understood as defined in Section 27; and Section 27(7) provides as follows -
'(7) In this Section -
(i) 'relative' means, in relation to the deceased -
(a) the wife or husband of the deceased,
(b) the father, mother, children, uncles and aunts of the deceased, and
(c) any issue of any person falling within either of the preceding sub-clauses and the other party to a marriage with any such person or issues;
It is, therefore, clear that by imposing conditions for the maintenance of his wife and unmarried daughters the donor had made provision for the maintenance of his relatives in each of the five gift deeds; but the question still remains as to whether Explanation to Section 12 would apply to such conditions. It is clear that there is no provision for the maintenance of the donor himself in this particular case and in each case there is only provision for the maintenance of one of the relatives viz., either the daughter or the wife in each of the five gift deeds. The words: 'for the maintenance of himself and any of his relatives' cannot be read to mean 'for the maintenance of himself or for the maintenance of any of his relatives because if there is provision for the maintenance of the donor himself, there is no necessity to invoke the Explanation to Section 12 and the word 'and' occurring in this phrase cannot be read to mean 'or' because in that event there is no necessity for the Legislature to provide ''for the maintenance of himself'. In the context in which this phrase occurs in the Explanation to Section 12, it is patently clear that what the Legislature intended to provide for and has in fact provided for is a clause whereby the settlor provides for the maintenance of himself and any of his relatives i.e. there must be provision for the joint maintenance of the settlor himself and any of his relatives and not merely a provision for the maintenance of a relative alone. Under these circumstances. Explanation to Section 12 will not ap-ply in the instant case.
11. The learned Advocate General is right when he contends that under Section 2(19) the properties covered by the gift deedsin question would be settled properties inasmuch as the property which under Section 2(15) includes any interest in property, stands limited to or in trust for the wife or the unmarried daughter concerned by way of succession i.e. as successor-in-interest; and it is clear that under Section 2(19) of old Act 'settlement' means any disposition including a dedication or endowment whereby property is settled. Simply because the document is called a Gift Deed and not a Deed of Settlement, it does not mean that if the other element laid down in the definition of Section 2(15) are present, the property cannot be said to be settled property; or the property cannot be said to be limited to or in trust for the wife or the unmarried daughters. The words 'by way of succession' do not mean either testate or intestate succession but are clearly intended to cover succession-in-interest, as one speaks of 'a successor-in-title' or 'a successor-in-interest' as distinguished from 'a predecessor-in-title' or 'a predecessor-in-interest'. Therefore, it is clear that for the purposes of Section 12 these five properties are settled properties and the documents though called gift deeds can be treated as Deeds of Settlement for the purposes of Section 12.
12. The main question is whether the condition for the maintenance of the wife and unmarried daughters can be said to be determinable by reference to the death of the deceased. In the instant case, the donee concerned in each of the five gift deeds is bound to maintain the mother in the case of the two minor sons, till her death; and in the case of the other donees, the sister concerned till her marriage; and this provision for maintenance is to continue irrespective of the occurrence of the death of the donor. Thus, this obligation of his own, which the donor had passed on to the donee concerned, is not for the life of the donor or is not for any other period determinable by the death of the donor but in each of the cases the beneficiary concerned is entitled to maintenance until marriage in the case of the unmarried daughters and till her death in the case of Sultanbu, the wife of the donor. Therefore, in our opinion, it is difficult to apply the provisions of Section 12 to these Gift Deeds and to include the value of the properties covered by the five gift deeds as that of the value of the properties deemed to pass under Section 12. Once it is held that the explanation to Section 12 is not applicable, it is clear that simply by making provision for the maintenance of his relatives, the donor cannot be deemed to have reserved an interest for himself and the relevant clause in each of the trust deeds is to be looked at purely from the point of view of determinability with reference to the death of the de-ceased under Sub-section (1) of Section, 12. In our opinion. Section 12(1) cannot apply and we have to consider whether the case falls under any of the other provisions of the Act
13. Section 10 of the Act, which has been relied upon by the Revenue, states that property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. As explained by the Supreme Court in George Da Costa v. Controller of Estate Duty. Mysore : [1967]63ITR497(SC) :--
'The crux of the section lies in two parts:
(1) the donee must bona fide have assumed possession and enjoyment of the property, which is the subject-matter of the gift, to the exclusion of the donor, immediately upon the gift, and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him, by contract or otherwise. As a matter of construction we are of opinion that both these conditions are cumulative. Unless each of these conditions is satisfied, the property would be liable to estate duty under Section 10 of the Act ....... The second part of the section has two limbs: the deceased must be entirely excluded, (i) from the property, and (ii) from any benefit by contract or otherwise.'
In the instant case, there is no dispute regarding the assumption by the donee in the case of each of the five gift deeds of possession and enjoyment of the property, which was the subject-matter of the gift, to the exclusion of the donor immediately, upon the gift; and, therefore, the first part of the section does not require consideration in this case. Again, there is no question of the entire exclusion of the donor from the property itself and the only question is whether he was excluded entirely from any benefit in the property by contract or otherwise.
14. Mr. Sheth, on behalf of the accountable person, contended before us that the provision made by the donor for the maintenance of his wife and unmarried daughters was not a benefit derived by him by contract. In this connection, he relied on the decision of the Privy Council in Oakes v. Commissioner of Stamp Duties of New South Wales, (1954) AC 57. In that case, the testator, who owned a grazing property in New South Wales, executed a deed poll under Which, as from July 1, 1924, he held theproperty upon trust for himself and his four children as tenants-in-common in equal shares. The deed gave him wide powers of management, and in particular provided that, in addition to reimbursing himself all expenses incurred in the administration of the trust, he was entitled to remuneration for all work done by him in managing the trust property, on which he resided with his family in his capacity as trustee and manager, in the same manner and as fully in all respects as if he were not a trustee thereof. The testator continued to manage the trust property until his death, receiving certain varying sums annually as remuneration, and after deducting those and other outgoings and expenses he divided the profits from the property into five equal shares, crediting one share to himself and one share to each of his children. The children's shares he applied during their minority for their maintenance and education, and paid them to the children when they came of age. The relevant contention regarding the maintenance of the minor children is dealt with in the report at page 72 thus:--
'But the statute requires not only exclusion of the donor but also exclusion of any benefit to him, and it was on that matter that the argument turned. It appears from the case that after the children came of age they received payment of their shares of the income; it is not said that that involved any benefit to the deceased. But before they came of age their shares of income were used to pay for their maintenance and education, and it was said that this afforded some relief to the deceased, who would otherwise have had to pay out of his own money. Two arguments were submitted. In the first place it was said that spending the children's money in this way was improper or at least disadvantageous to them, and that this combination of advantage to the donor with disadvantage to the donee brought the case within the statute. Their Lordships do not find any sufficient basis in fact for this argument. There is nothing in the case from which It can be inferred that the deceased acted at all improperly in this matter. At least after 1935 this money could properly be spent on the children's maintenance under statutory powers if that was in the best interests of the children. In the absence of anything to indicate the contrary, it must be taken that the deceased acted properly in so applying his children's income, that this was in the best interests of the children, and therefore the children must be held to have had full benefit and enjoyment of their money. The case might have been very different if it had appeared that the deceased had so spent his children's shares of the income from the trust notentirely in their interests but wholly or partly for his own benefit in order to relieve himself from the expense of maintaining his children.'
It is thus clear that under the relevant section of the law applicable to New South Wales, being Section 102(2)(d) of the Stamp Duties Act, 1920-40, which is for all purposes identical with our Section 10, the Judicial Committee held that if the settlor had relieved himself from the expenses of maintaining his children, then it would have been considered a benefit reserved by the settlor for himself within the meaning of that particular limb of the relevant section viz., by contract or otherwise, but on the facts of that particular case, their Lordships of the Privy Council held that the settlor had been spending the children's own income for their maintenance and education and that appears to be the ground on which the contention of the Revenue was not accepted by the Privy Council in Oakes's case. 1954 AC 57 (supra).
15. In Clifford John Chick v. Commissioner of Stamp Duties, (1958) AC 435: 37 ITR 89. Oakes's case, 1954 AC 57 (supra) came up for consideration before the Privy Council, and it was observed:--
'It must be observed that in Oakes's case, 1954 AC 57 the Board appears to have been dealing with the second limb of the sub-section, the question being whether the donor was entirely excluded from any benefit to him of whatsoever kind or in any way whatsoever. It is possible that in the consideration of this very difficult part of the sub-section it may be pertinent in some cases to inquire whether the benefit derived by the donor is one that impairs or detracts from the donee's enjoyment of the gift. Their Lordships, with great respect, think that this is a matter which may require further examination, but, as they have already said, they are clearly of opinion that it is not a relevant consideration where the question arises under the first limb of the sub-section and is whether the donor has been entirely excluded from the subject-matter of the gift.'
And it was indicated in that case that In that particular case, they were not concerned with the second limb of the Sub-section.
16. It is true that in Oakes's case, 1954 AC 57 Lord Reid stated:--
'But their Lordships will assume that there was some advantage to the deceased, but that advantage was not at the expense of the children and did not impair or diminish the value of the gift to them or their enjoyment of it. It is possible for a donee, in the full and unrestrained enjoyment of his gift to use or spend it in a way that happens to produce someadvantage to the donor. But in their Lordships' judgment, any such advantage is not a benefit within the meaning of the section.'
Now, so far as the Oakes's case, 1954 AC 57 is concerned it is obvious that the main question was whether by spending the money during the minority of the children for their maintenance and education there was any impairment or diminution in the value of the gift made to the children and it was in that context that these observations of Lord Reid have to be read. In the instant case, the gift to the donee concerned is certainly impaired or diminished in value by the provision for the maintenance either of the mother or of the unmarried daughter mentioned in each of the five gift deeds; and by so impairing or diminishing the value of the gift, the donor at the same time was deriving the benefit to himself viz., of getting rid of the obligation to provide maintenance for the wife and unmarried daughters. It is, therefore, clear that in the instant case, the conditions imposed for the maintenance of the wife and the unmarried daughters would obviously fall under the second limb of the second part of Section 10 of the Act as analysed by the Supreme Court in George Da Costa's case : [1967]63ITR497(SC) (supra). It is, therefore, clear that in each of the five gift deeds, the donee concerned has not retained the possession and enjoyment of the properties covered by the gift deed to the entire exclusion of any benefit to the donor during his life-time but the donor received the benefit in the shape of relief from the obligation to maintain his wife and unmarried daughters.
17. Mr. Sheth contended that there Is a vital difference between the provisions of Section 10 of our Act and the similar other provisions of the statutes dealing with estate duty either in England or in Australia. At page 61 of the report in (1954) AC 57, the provisions of Section 102(2) (d) of the New South Wales Stamp Duties Act, 1920-40, are reproduced, and a comparison of those provisions with Section 10 of our Act makes it clear that the Indian Legislature has substituted 'to the extent' for 'of which' at the relevant place in Section 10; and of necessity had to add the words 'of it' after 'enjoyment' in order to make the whole clause grammatically correct. At page 71 of the report. Lord Reid has pointed out that Section 102(2)(d) of the Stamp Duties Act of Australia corresponded with Section 11 fl) of the United Kingdom Customs and Inland Revenue Act, 1889, and Section 43(2)(a) of the United Kingdom Finance Act, 1940. Mr. Sheth, for the accountable person contended before us that even if the property covered by the gift can be deemed to pass on the donor's deathunder Section 10 because of the non-exclusion of the benefit to the donor, it must be deemed to pass only to the extent of the benefit and not to the extent of the full value of the property. He contended that the Indian Legislature has deliberately departed from the similar provisions of the English and Australian statutes by providing that the property shall be deemed to pass on the donor's death to the extent of the benefit, possession etc. ^We must make it clear that in the instant case we are only concerned with the second limb of the second part of Section 10 and we have to consider in the instant case whether any of the properties included in the relevant gift deeds has been indicated with precision or specification as the property subject to this obligation for providing maintenance for the wife or the unmarried daughters. It is only if there is any such specification or setting apart of any of the properties in respect of which the donor had not been excluded that one can apply the words, 'to the extent' in the concept of non-exclusion of the donor from any benefit, under the second limb of the second part of Section 10, The gift deeds make it clear that all the properties covered by the relevant gift deeds are subject to this obligation to provide maintenance for the beneficiary concerned viz., the wife or the unmarried daughter for whom the provision is made in the relevant gift deed and it cannot be predicated in the case of each of the five trust deeds, any particular extent or portion of the property is subject to this obligation for maintenance, the rest of the properties being free from such obligation. Since it cannot be so predicated, it is clear that all the properties covered by each gift deed are subject to the condition for providing maintenance to the person concerned and, therefore, it is clear that in the case of each of the five Trust deeds, the donee has not retained possession and enjoyment of the property to the entire 'exclusion of any benefit to the donor. Since there is non-exclusion of the benefit to the donor with reference to the entire property, it is clear that the words 'to the extent' occurring in Section 10 cannot help any of the donees in the instant case.
18. In the course of his arguments, Mr. Sheth relied upon the decision of the Andhra Pradesh High Court in Mohammed Bhai v. Controller of Estate Duty : [1968]69ITR770(AP) and contended that merely because the deceased was entitled to conduct his shop on the ground floor of the property gifted by him to Kikabhai, it did not mean that the deceased was deriving any benefit from the subject-matter of the gift. Relying on this decision he further contended that the benefit contemplated under Section 10 mustbe confined to the extent of the property in respect of which the benefit is derived and does not apply to the other property. As regards the shop premises, we have Indicated in the course of this judgment that Section 10 would not be attracted to this portion of the condition because the shop is to be allowed to be run on the ground floor of the premises permanently and thus the interest cannot be said to pass on the death of the deceased. Assuming that we are wrong on that aspect of the interpretation of Section 10, it is clear, that in the light of the judgment of the Supreme Court in : [1967]63ITR497(SC) that the whole of the property, where the shop premises are situated, would be includible in the total value of the estate of the deceased. In George Da Costa's case : [1967]63ITR497(SC) (supra), the Supreme Court has pointed out that the crux of the Section 10 lies in two parts: (1) the donee must bona fide have assumed possession and enjoyment of the property, which is the subject-matter of the gift, to the exclusion of the donor, immediately upon the gift, and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him, by contract or otherwise. The Supreme Court took the view that as a matter of construction, both these conditions are cumulative. Unless each of these conditions is satisfied, the property would be liable to estate duty under Section 10 of the Act. The Supreme Court further pointed out that the second part of the section has two limbs; the deceased must be entirely excluded, (i) from the property, and (ii) from any benefit by contract or otherwise. In the instant case, so far as the shop premises are concerned, the second limb of the second part of the section is not to be attracted and the only question is whether the deceased was entirely excluded from the property which has been gifted and to the extent that he has not been so excluded, the property gifted is deemed to pass at the time of the death of the donor. At page 503 of the report, after considering the different cases on the subject, Ramaswami J. observed:--
'It appears from all these cases that the first limb of the section may be infringed if the donor occupies or enjoys the property or Its income, even though he has no right to do so which he could legally enforce against the donee. Where the question is whether the donor has been entirely excluded from the subject-matter of the gift, that is the single fact to be determined. If he has not been so excluded, the eye need look no further to see whether his non-exclusion has been advantageous or otherwise to the donee.'
In this connection, Ramaswami J. has followed the observations of Viscount Simonds in Chick v. Commissioner of Stamp Duties of New South Wales. 37 ITR (ED) 89 : 1958 AC 435.19. With respect to the learned Judges of the Andhra Pradesh High Court, we are unable to agree with the conclusion that merely because the deceased was living in the house gifted by him to his wife, it did not mean that the deceased was deriving any benefit from the subject-matter of the gift. With utmost respect to the learned Judges of the Andhra Pradesh High Court, they overlooked that so far as the house gifted by the deceased is concerned, it was the first limb of the second part of the section, which was attracted, viz., non-exclusion from the property which was gifted by the deceased; and when that limb is attracted, there is no question of any benefit being derived by the donor from the subject-matter of the gift. In any event, as we have pointed out in the course of this judgment the provisions of Section 10 of the Act are attracted to this case because of the benefit that was derived by the deceased, viz., relief from his obligation to maintain his wife and unmarried daughters,
20. Even if our interpretation regarding the non-applicability of Section 10 to the shop premises mentioned in the gift deed in Kikabhai's favour were not correct, it is clear that by reason of the condition for maintenance, all the properties included in the gift deed in his favour would be covered by Section 10. In our opinion, therefore, all the properties mentioned in each of the five gift deeds would be covered by Section 10 and all the properties Included in those five gift deeds must be deemed to have passed on the death of the deceased because in the case of all those properties there was non-exclusion of benefit to the donor within the meaning of the second limb of the second part of Section 10 of the Act
21. The result, therefore, is that the value of the immoveable properties included under the five gift deeds made by the deceased on September 25, 1951, in favour of his five sons, has to be Included in the principal value of the estate of the deceased under the provisions of Section 10. We, therefore, answer the question referred to us in the affirmative and as follows:--
'The sum of Rs. 1,75,000 representing the value of the immoveable properties gifted by the deceased to his five sons by five gift deeds dated September 25, 1951, has been correctly included in the principal value of the estate of the deceased under the provisions of Section 10 of the Estate Duty Act. 1953.'
The accountable person will pay theCosts of this Reference to the Controllerof Estate Duty.