Judgment

VENKATACHALIAH, J. :- These appeals, by certificate, under S. 65 of the Estate Duty Act of 1953 (Act for short) - one by the accountable person and the other by the Deputy Controller of the Estate Duty - arise out of and are directed against the judgment dated, 11-10-74 of the High Court of Calcutta, answering, in a reference under S. 64(1) of the Act, the question of law referred for its opinion,

The matter pertained to the determination of the principal value of the estate passing on the death, which occurred on 24-3-1960, of a certain Satya Charan Srimani. Dipti Narayan Srimani, appellant in C.A. 946/1975 is the son of the deceased and is the accountable person.

2. The said Satya Charan Srimani during his lifetime had executed three trust deeds, dated, 8-12-1947, 21-9-1953 and 4-10-1959 respectively. In the proceedings, the nature and effect of the dispositions made under the deeds of the trust, dated 21-9-1953 and 4-10-1959 fell for consideration.

Under the deed, dated 21-9-1953, Satya Charan Srimani as settlor transferred upon trust to himself as trustee 4 items of immovable property, viz., 130 and 133, upper circular Road, and 32/5 and 32/6 Beadon Street, Calcutta. The objects and purposes of the trust, broadly stated, were :

(i) the conduct of the daily worship and sevas of the Deity Sree Sridhar Jiu,

(ii) the carrying out of certain charitable acts, deeds and things mentioned in schedule B of the deed;

(iii) the making of provision for the maintenance of himself and the persons mentioned in the said deed.

The trustee was required, after defraying taxes and other out goings, to accumulate 1/4th of the net-income to be set apart for purposes of effecting certain additions and alterations to the properties; to make over another 1/4th of the net-income to the shebait for the conduct of the daily and periodical pujas, worship and rituals of the said deity, another 1/4th for the charities mentioned in the deed and the remaining 1/4th for the personal benefit of the settlor during his lifetime and to his heirs thereafter. After the developmental works were complete, the proportions of the shares allotted to various objects were suitably modified in that 7/16th share was to be made over to the shebait; 4/16th share to be spent for charitable purposes and 5/16th for the benefit of the settlor and his heirs.

3. Under the deed dated 4-10-1959, the settlor transferred upon trust to himself and his son Dipti Narayan Srimani as Trustees, six other properties, one of them situate in Varanasi, for the conduct of daily-worship and periodical festivals, rituals and ceremonies of the deity, Shri Ishwar Gobinda Jiu; for certain charitable purposes and also for the benefit of himself and his heirs. The settlor provided for his residence, free of rent, in one room on the ground floor in the Varanasi property. A 1/4th of the net-income of the trust-properties, after defraying expenses and taxes, was to be paid to the shebait for the conduct of the worship, rituals and services of the deity Shri Ishwar Gobinda Jiu; another 1/4th to be spent on the charitable purposes mentioned in the deed and the balance of 1/2 for the development, additions and alterations of two of the trust-properties viz. Nos. 41 and 42 Macleod Street, Calcutta. After completion of the developments and alterations, the said 1/2 share was stipulated to go for the benefit of the settlor during his lifetime and thereafter to his heirs. Under both the dispensations, the settlor constituted himself the shebait.

4. In the proceedings of assessment to estate duty, the question arose whether the trust-deeds attracted - and fell within - S.12(1) of the Act. The accountable person contended that the four trust properties under deed dated 21-9-1953 could not be said to be "Settled Property" within the definition in S. 2(19) and that all events what must be held to pass would only be a 1/4th share, corresponding to the benefit reserved for the settlor and his heirs. Similarly, in resp