THE CONTROLLER OF ESTATE DUTY, LUCKNOW v. ALOKE MITRA (2)

Citation: [1981] 1 S.C.R. 943

Court: Supreme Court of India

Bench: A.P. SEN, E.S. VENKATARAMIAH

Case summary

65 (1) of the Estate Duty Act, 1953 (hereinafter referred to as 'the Act') arises from a judgment of the Allahabad High Court delivered on a case stated under s....

Judgment text

THE CONTROLLER OF ESTATE DUTY, LUCKNOW v. ALOKE MITRA October 10, 1980 [A. P. SEN AND E. S. VENKATARAMIAH, JJ. ] The Estate Duty Act, 1953-S. 5 sub-s. (! ) and s. 6-lnter relation of- Whether property held by a benamidar passes upon the death of the real owner and should be brought to charge under sub-s. (1) of s. 6 of the Act or is deemed to pass under s. 6. Words & Phrases--Benami-Benamidar-Meaning of. One M carried on the business of printer and publisher. In 1953 his brother-in-law alongwith some other persons floated· two companies a publishing firm and a printing press. Under an agreement dated May 29, 1953 M agreed to transfer his business to the newly floated companies, and on January 24, 1954 he wrote letters intimating that. the shares in the companies be allotted to his wife, his 3 sons, his brother-in-law and an ex-employee. The companies allotted the shares accordingly.

502 shares were allotted to M in his own name in the publishing firm and 225 shares in the printing press. Of the remaining, 2002 shares in the publishing firm and 1602 shares in the printing press were allotted to M and his nominees. M died on February 11, 1957. On his death the respondent, the accountable person filed a return of estate duty in which he included the, value of the 502 shares in the publishing firm and 225 shares in the printing press. The Assistant Controller of Estate Duty did not accept this part of the return and included the 2002 shares in the publishing firm and 1602 shares in the printing press standing in the name of the wife of the deceased, his 3 sons, brother-in-law and the ex-employee, since they were holding these shares benami, and included the value of these shares in the principal value cf the estate of the deceased. In appeal, the, Central Board of Direct Taxes, the Appellate Tribunal affirmed this order.

It observed that the mere fact that the subject-matter was the shares in· the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject-matter was some other property. When money was paid by the deceased, it was for the accountable person to prove the gift. The deceased had clearly mentioned in his letters dated January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him. If the deceased intended to make an outright gift of the shares, he would have very well said so in the letters. There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift. The High Court answered the reference against the appellant and in favour of the accountable person. Following the decisions of the Andhra Pradesh High Court in Shantabai Jadhav v.

Controller of Estate Duty (1957} 31 ITR 28 and Smt. Denabai Bomab Shah v. Controller of Estate Duty (1964) 51 ITR f appointment will also fall within section 6. [957H; 958A] O. S. Chawla v. Controrler of Estate Duty (1973) 90 ITR approved. CONTROLLER ESTATE DUTY v. ALOKE MITRA (Sen, J. ) 945 4. In ap~lying the Act to any particular transaction, regard must be had to its substance, that is, its true legal effect, rather to the form in which it is -carried out. [958B] 5. By no rule of construction can the operation of sub-section (1) of sec· _ tion 5 c,if the Act be cuotailed by the operation of section 6. It is in addition to or supplemental of the provisions of sub-section (! ) of section 5, which is the charging section. [951E] In the instant case, it has been established that the deceased was the real owner of the shares. The ownership which the deceased had in the shares pas· sed on his death and must be brought to charge under su~-section (l) o~ section 5. [958C] Smt.

Denabai Bomab Shah v. Controller of Estate Duty (1967) 66 ITR 385 and Smt. Shantabai Jadhav v. Controller of Estate Duty (1964) 51 ITR (ED) disapproved. 6. (i) The provisions of sections 5 and 6 of the Act are somewhat similar to these of sections 1 and 2 of the Finance Act, 1894 in England. [955F] (ii) The precise relationship between sections 1 and 2, before the law was amended in 1969, was a question on which judicial opinion fluctuated widely. For over sixty years they were regarded as mutually exclusive and having in· dependent fields of operation, the view was that property could not be liable to duty concurrently. In a situation where both sections 1 and 2 might apply, section 1 took priority and excluded liability. [9520-E] Earl Cowley v. Inland Reve1Jue Commissioners, L. R. [1899] A. C. 198, Attorney Gene~al v. Milne, L. R. [1914] A. C. 76~, Nevill v. Inland Revenue ·Commissioners, L. R. [1924] A. C. 385 referred to. (iii) In Public Trustee v.

Inland· Revenue Commissioners (Re Arnbody) LR '[1960] AC 398 the House of Lords struck the discordant note, holding that sec· ·tion 1 imposed the charge in general terms and section 2 by exclusion and in· clusion, defined area of that charge. In Wei~'s Settlemellt Trusts, Re Mc Pherson. v, Inland Revenue Commissioners LR [1971] Ch. D. 145 the Court of Appeal resolved the doubts as to the relationship of these two sections. [954C; G, 955A] 7. When a property is purchased by a husband in the name of his wife or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift. When the benamidar is in possession of the property, standing in his name, he is in a sense the trustee for the real owner; :he is only a name-lender or an alias for the real owner. [1958F; 959A] Gopeekrist Gosain v.

Gungapersaud Gosain (1854) 6- MIA 53, Sura Lak· -shmiah Chetty v. Kothandarama Pillai L. R. [1924-25] 52 IA 286, Shree Meena· kshi Mills Ltd. v. C. I. T. (1957) 31 ITR 28 referred to. 8. A benamidar has no interest at all in the property standing in his name•. A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual 'or constructive notice of the real title. But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof. [960E] Mayne Hindu Law Inh Edn. p. 953 referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1712 of 1973. From the Judgment and Order dated 20-5-1971 of the Allaha- ·~ bad High Court in Estate Duty Reference No. 95/66 connected with· Estate Duty Reference No. 78/69. __.. ) S. C. Manchanda, K. C. Dua and Miss A. Subhashini for the Appellant. P. K. Mukherjee and Pramod Swarup for the Respondent.

The Judgement of the Court was delivered by SEN J. -This appeal on certificate under s. 65 (1) of the Estate Duty Act, 1953 (hereinafter referred to as 'the Act') arises from a judgment of the Allahabad High Court delivered on a case stated under s. 64 of the Act by which the High Court answered two of the que~tions against the accountable person and in favour of the Controller of Estate Duty but the third in the negative, against the . Controller of Estate Duty and in favour of the accountable person. We are not concerned with the first two questions, but only the third, which reads : 'fl "Assuming that the shares in dispute really belonged to Sri K. M. Mitra deceased, whether those shares in the circumstances of the case constituted property which passed on the- .. death of Sri K. M. Mitra for the purposes of section 5 of the· ~ Estate Duty Act. " The facts giving rise to the reference are these : The late Sri K. M.

Mitra died on February 11, 1957 leaving a large and extensive estate. On his death his son Aloke Mitra, the accountable person, filed a return of estate duty valuing the estate of deceased at R~. 3,75,235. This included 502 shares of Rs. 100/- each in Mitra ~ Prakashan Pvt. Ltd. and 225 shares of Rs. 100/- in Maya Press Pvt. Ltd. held by the deceased. The Assistant Controller of Estate Duty did not accept this part of the return and included 2002 . shares in Mitra Prakashan Pvt. Ltd. and 1602 shares in Maya Press Pvt. Ltd. standing in the name of Smt. N. Mitra, wife of the deceased, and his three sons, Aloke Mi:tra, Ashoke Mitra and Deepak Mitra, brother-in-law B. N. Ghosh and an ex-employee, R. N. Misra since they were holding these shares benami. . He accordingly included the value of these shares in the principal value of the estate of the deceased. His order was affirmed in appeal by the Central Board of Direct Taxes, that is, the Appellate Tribunal. Under &'.

64(1) of the Act the Appellate Tribunal referred the questi:on whether the shares allotted to the wife of the deceased as his nominee or as benamidar, were, as from the commencement of the Hindu Succession Act, 1956 held by her as a full owner thereof by virtue of provisions of s. ·14 of that Act. According to the High Court, the said question did not at all arise. On the finding that the transaction was benami and that the deceased was the real owner of the shares, the wife must be held to have no interest or title to the shares. She was merely a benamidar or name-lender. Since she had no interest at all, the provisions of s. 14 of the Hindu Succession Act were not attracted as she was not possessed of any right or title. The material facts of the case may now be stated. The deceased carried on the business of printer and publi:sher under the name and style of Maya Press. In 1953, his brother-in-law, B. N.

Ghosh alongwith some other persons floated two companies, Mitra Praka· shan Pvt. Ltd. and Maya Press Pvt. Ltd. Under an agreement dated May 29, 1953 the deceased agreed to transfer his publishing business to Mitra Prakashan Pvt. Ltd. for a consideration of Rs. 2,07,500 and the printing business to Maya Press Pvt. Ltd. for Rs. 1,64,800. It was agreed that the consideration would be paid by Mitra Prakashan Pvt. Ltd. in the form of cash to the extent of Rs. 7,500/- and the balance by allotting 2000 fully paid up shares of the value of Rs. 100/- each to the deceased or his nominees. The other com· pany, namely Maya Press Pvt. Ltd. agreed to pay Rs. 4,800/- in cash and the balance of Rs. 1,60,000 in the form of 1600 fully paid up shares of the value of Rs. 100/- each to be allotted in the name of the deceased or his nominees. In pursuance of thi:s agreement, . the business of Maya Press was transferred by the deceased on July 1. 1953 to the two companies.

On January 24, 1954 the deceased wrote to the two companies letters intimating that the shares . be allotted to his wife Smt. N. Mitra, three sons Aloke Mitra, Ashoke Mitra, Deepak Mitra, brother-in-law B. N. Ghosh and an ex-employee, R. N. Misra. The companies allotted the shares accordingly. They in addition allotted two more shares to the deceased. Thus, 502 &·hares were held by the deceased in his own name in Mitra Prakashan Pvt. Ltd. and 225 shares in Maya Press Pvt. Ltd. The rest were held by his wife, sons, brother-in-law and an ex-employee. It has been found that the total number of shares issued by the two companies was 2006 by the Mitra Prakashan Pvt. Ltd. and 1605 by Maya Press Pvt. Ltd. Out of these 2002 and 1602 shares respectively were held by the deceased and his nominees.

The deceased by transferring his personal printing and publishing business to the two new companies had thus become through himself or his nominees practically the exclusive owner of these two companies. It is an admitted fact that the deceased supplied the entire consideration for the purchase of these 2002 and 1602 shares and that his J wrre, sons, brother-in-law or the ex-employee did not make any contribution for their acquisition. _ ·C On these facts, both the Assistant Controller of Estate Duty as well as the Appellate Tribunal held that the share scrips standing in the name of the wife of the deceased and his sons, brother-in-law and the ex-employee really belonged to the deceased as they were mere benamidars and, therefore, included . the value of the shares held by the deceased in the name of his wife and sons etc. in the principal value of the estate passing on his death. The true legal effect of the finding of the Appellate Tribunal is this : Smt. N.

Mitra, wife of the deceased, his three sons, brother-in-law and the cxemployee held the shares benami for the benefit of the deceased. They were, therefore, the benamidars of 1the deceased. While upholding the order of the Assistant Controller, the Central Board of Direct Taxes observed that the mere fact that the subject-matter was the shares in the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject-matter was some other property. When money was paid by the deceased, it was for the accountable person to prove the gift. The deceased had clearly mentioned in the letters dated" January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him. If the deceased intended to make an outright gift of these shares, he would have very well said so in the letters.

There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift. Using of names of benamidars for holding of shares in companies was as common as for any other type of property. As regards· the enjoyment of the income of these shares, it observed that there was no clear evidence to show that the money was actually used by the nominees. It appeared that the dividends were only credited by book entry to the personal accounts of the deceased, Aloke Mitra and the deceased's wife the account of the deceased's wrfe was alf! o credited with dividends in the names of others than Aloke Mitra. There was nothing to show that before the death of• the deceased these amounts were actually withdrawn and utilised by 1the persons to whom they were supposed to belong. Whatever was done after the death of the B.

deceased may, by agreement between the heir~, have been adjusted in the allocation of other assets, and obviously could not be of any le-gal effect m determining the question whether the shares belonged to the deq:ased. As already stated, the only question of law in the opinron of the Appellate Tribunal which could be referred undet s. 64(1) of the Act, was whether the shares allotted to the wife of the deceased as his nominee or as benamidar were, as from the commencement of the Hindu Succession Act, 1956 held by her as full owner thereof by virtue of the provisions of s. 14 of that Act. But it declined to make a reference on the other questions, holdmg that the finding that the shares were held by the deceased ·in the name of his wife and sons etc. benami, was a finding of fact and it did not give rise to any question of law. The accountable person being dissatisfied moved the High Court under s.

64(3) and it directed the Tribunal to draw up a supplementary statement of the case and refer two other questions of law said to arise from its order. When the reference came up before the High Court, it declined to answer questions other than those which were questions of law. It refused to be drawn into the question of benami, which was purely one of fact, and not one' of mrxed law and fact and, therefore, following the deci- 1 sion of this Court in Shree Meenakshi Mills Ltd. v. C. /. T. ( ) held that the finding was not open to review under s. 64(1) of the Act. In answering the reference in the negative and against the Controller of Estate Duty, and in favour of the accountable person, the High Court merely observed 'As at present advised' and preferred to follow the two decision~ of the Andh'ra Pradesh High Court m Smt. Shantabai . Tadhav v. Controller of Esiate Duty(2) and Smt. Denabai Bomab Shah v. Controller of Estate Duty(3) taking a view to the contrary.

There is no discussion in the judgment at all and it seems that its attention was not drawn to s. 5(1) of the Act. Following the view in Smi. Shantabai ladhav's case and Smt. Denabai Bomab Shah's cas~ the High Court observed that since the shares· (! ) [1957] 31 ITR 28. (2) [1964] 51 ITR (ED) L (3} [1967] 66 ITR 385. stood in the name of the wife and sons etc. benami for the deceased, the deceased had no power to transfer since he had not obtained a release from the benamidars or a declaration from an appropriate court. On this wrongful assumption, the High Court held that the deceased remained mcompetent to transfer the shares till his death, and so, the property in them would not be deemed to pass upon his death by reason of s. 6 and, therefore, they were not includiole in the estate of the deceased under s. 5(1) of the Act. 1 In Controller of Estate Duty, U. P. v. T. N. Kochhar( ) the Higb Court following the judgment under appeal, observed : "It is well-settled that !

he property which stands benami in the name of another is one in respect of which the benefici:al o-WUer has no competency to dispose of. Before he can dispose of such a property he has to acquire a declaration from the appropriate court of law releasing the property in his favour. " The High Court seems to assume that there is some interrelation between ss. 5 and 6. It has held that though the shares in question really belonged to the deceased, they would not, on the facts and in the circumstances of the case, constitute property which 'passed' on the deatl) of the deceased for the purpose of s. 5 (1) of the Act since the shares stood in the name of wife and sons etc. benami for ,the deceased, but he had only beneficial interest therein inasmuch as the deceased was at the time of his death hot competent to dispose of the shares and they could not be 'deemed to pass' under s. 6 of the Act. The mai:n question involved in the appeal is whether in the case of 3!

benami transaction, the value of the property held by a benami- . F aar passes upon the death of the real owner and is includible in the estate of the deceased under s. 5 of the Act, or being so held by the benamidar, it cannot be deemed to pass on his death because of s. 6 of the Act and, therefore, the value of such property cannot be included in the principal value of the estate of the deceased. That depends upon the precise effect of s. 5(1) and s. 6 and their relation- ·G ship to one another namely, whether the chargeability of estate duty under s. 5(1) of the Act, is limited and controlled by s. 6. The Estate Duty Act, 1953 imposes a tax upon the principal value of all properties, settled or not settled, passing on death or deemed to pass on death. Estate duty is chargeable at percentage rates rising with the value of the estate on all property passing on (l) [1973] 89 lTR 216.

death, including property of which the deceased was compet~nt to ·dispose and gifts made within limited period before death. Prllllary liability falls on the deceased's estate. '-- The charging section is sub-s. (1) of s. 5 which provides that in ·case of a person dying after the commencement of the Act, estate duty is leviable on the capital value of all property, settled or not ·settled which 'passes' on death at the rates fixed in accordance with ·s. 35. That is followed by a group of sections, ss. 6 to 15, which relate to the levy of estate duty on properties which by the Act are ·'deemed to pass' on death. For the avoidance of doubt, it is pro- -- vided by sub-s. (3) of s. 3 that references in the Act to property -passing on death of a person shall be construed as including refer- ~nces to property deemed to pass on the death of such person. The ,.. ·expression 'property passing on death' is defined ins. 2(16) to include property passing immediately on death.

In general, the word "passes' may be taken as• meaning 'changing hands on death' regardless of its destination. Section 6 of the Act, upon which the controversy" films, -provides: - "6. Property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death. " "By no rule of construction can the operation of sub-s. (1) of s. 5 of the Act be curtailed by the operation of s. 6. It is in addition to or ·supplemental of, the provisions of sub-s. (1) of. s. 5, which is the -charging section. As a matter of construction, two views are possible. One view 'is that the two sections are mutually exclusive and they have independent fields of operation. Whenever property changes hands on death, the State is entitled to step in and take a toll of the property as it passed without regard to its destination or to the degree of relation- 'Ship, if any, that may have subsisted between the deceased and the -person or persons succeeding.

Section 5(1) gives• effect to that principle and it imposes a duty called estate duty upon the principal -value of all property, settled or not settled, which passes on death. Section 6 does not apply to property of which the deceased was -competent to dispose of and which passes• on his death; it applies ·only to property which does not pass on his death but of which he was competent to dispose. Sections 5(1) and 6 being mutually exclusive, the application of s. 5 accordingly precludes recourse to '.! >. 6. The other and the better view appears to be that s. 5( 1) aloJ:! e is capable of imposing a chatge of duty and where both s. 5{1) and' s. 6 apply, the property would still be dutiable under both concurrently. Section 6 is merely subsidiary and supplementary and it declares that the expression 'property passing on the death of the deceased' shall be 'deemed to include property which the deceased was competent to dispose of'. When s.

6 has brought property within the charge of duty 'either alone' as in the case of competency to dispose of under s. 6, which could not be supposed to 'pass on death' or concurrently with s. 5, its function is at an end. In England, the Finance Act, 1894 (57 & 58 Viet. c. 30) J imposed by s. 1 been said above is sufficient to dispose of the appeal. It, however, becomes necessary to deal with the law relating to benami transactions as there is some misconception as · to the fl. nature of the rights of a benamidar. What follows is purely elementary. The law in this matter is not in doubt and is authoritatively stated by a long line of decisions of the Privy Council starting from the well known case of Gopeekri! '}t Gosain v. Gungapersaud 1 2 Gosain( ) to Sura Lakshmiah Chetty v. Kothandarama Pillai( } and 3 of this Court in Shree Meenakshi Mills Ltd. v. C. l. T. ( ). As observed by Knight Bruce L. J. in Gopeekrist Gosain's case, the doctrine of advancement is not applicable io.

India, so as to raise the question of a resulting trust. 'fhen a property is purchased by a husband in the name of his wife, or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a ·~ gift of the property to them, the onus rests upon them to er;tablish such a gift. In Sura Lakshmiah Chett-y's cme, the law was stated with clarity by Sir John Edge in these words : "There can be no doubt now that a purchase in India by a native of India of -property in India in the name of his wife unexplained by other proved or admitted . facts is to be regarded: as a benami transaction, by which the beneficial interest in the property is in the husband, although the ostensible title i:s inc the wife. " (1) [1854] 6 MIA 53. (2) L. R. [1924-25] 52 IA 286. (3) [1957] 31 ITR 28.

' It is but axiomatic that a benami transaction does not vest any title in the benamidar but vests it in the real owner. When the benamidar is in possession of the property standing in his name, he is in a sense the trustee for the real owner; he is only a name-lender -0r an ali. 1s for the real owner. In Petheperumal Chetty v. Muniandy 1 Servai( ), the Judicial Committee quoted with approval the following passage fro! ll Mayne's Hindu Law 7th ed. , para 446: "Where a transaction is once made out to be a mere benamr, it is evident that the benamidar absolutely disappears from the title. His name is simply an alias for that of the person beneficially interested. " The cardinal distinction between a trustee known to English law and a .

benamidar lies in the fact that a trustee is the legal owner of the p;·opcrty standing in his name and cestui que trust is only a beneficial owner, whereas in the case of a,benami transaction the real owner has got the legal title though the property is in the name of the benamidar. It is well settled that the real owner can deal with the property without refer. ence to the latter. In Gur Narayan v. Shea Lal Singh (2), the Judicial Committee referred to the judgment of Sir George Farwell in Mst. Bi/as Kunwar v. Dasraj Ranjit 2 Singh( ), where it was observed that a benami transaction had a curious resemblance to the doctrine of English law that the trust of the legal estate results to the man who pays the purchase-money, and went on to say : " .. the benamidar. has no beneficial interest in the property or business that stands in his name; he represents, in fact, the Teal owner, and so far as therr relative legal position is concerned he is a mere trustee for him. " 4 .

In Guran Ditta v. Ram Ditta( ) the Judicial Committee reiterated , the principle laid down in Gope,ekrist Gosain's case and observed that . in case of a be,nami transaction, there is a resulting trust in favour of the person providing the purchase money. A benamidar has no interest at all in the property standing in his name. Where the transaction is once made out to be benami, the Court must give effect to the real and not to the nominal title subject to certain exc;:eptrons. ·In Mulla's Hindu Law, 14th edn. , p. 638, four exceptions to the normal rule are brought out. But these exceptions are not material in this case. One of the exceptions (t) [1907-08] 35 I. A. 98, (2) [1918-19] 46 IA 1. (3) L. R. [1915] 42 IA 202. (4) L. R. [1927] 55 IA 235.

enumerated therein is that where a benamidar sells, mortagages or otherwise transfers for value property held by him without the knowledge of the real owner, the real owner is not entitled' to have the transfer set aside unless the transferee had notice, actual or constructive that the transferor was merely a benamidar. The. principle is embodied in s. 41 of the Transfer of Property Act. The section makes an exception to the rule that a person cannot confer a better title than he has. The section is based on the well-lCnown passage from the judgment of the Judicial Committee in Ramcoomar 1 Koondoo v. Macqueen( ) : "It is a principle of natural equity, which must be unrver- J .

sally applicable, that where one man allows another to hold himself out as the owner of an estate, and a third person purchases it for value from the apparent owner in the belief that he is the real owner, the man who so allows the other to hold' himself out shall not be permitted to recover upon his secret title unless he can otherthrow that of the purchaser by showing, erther· that he had direct notice, or something which amounts to constructive notice, of the real title, or that there existed' circumstances which ought to have put him· upon an inquiry that, if prosecuted, would have led to a discovery of it. " A benamidar is an ostensible owner and if a person purchases from a b'enamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructi:ve notice of the real title. But from this it does not follow that the benamidar has real title to the · property, he is merely an ostensible owner thereof.

The law is sw;cinctly stated by Mayne in his Treatise on Hindu Law, 11th edn. , at p. 953, in the following terms: "A benami transaction is one where one buys property hi the name of another or gratuitously transfers his property to another, without indicating an intentfon to benefit tlie other. The benamidar, therefore, has no beneficial interest in the property or business· that stands in his name; he represents in fact the real owner and so far as their relative legal position is concerned, he is a mere trustee for him. In other words, a benami purchase or conveyance leads to a resulting trust in India, just 'as a purchase or transfer under similar circilmstances leads to a resulting trust in England. The general rule and principle of the Indian law as to resulting trusts differs but little if at all, from the general rule of English law upon the same subject. " (I) [1872] I. A. Sup. 40, 43. (See also: Shree Meenakshi Mills Ltd. v. C. l. T. (1957) 31 ITR n. per Venkatarama Ayyar J.

, and Thakur Bhim Singh v. Thakur Kan Singh [1980] 3 SCC 72, per Venkatammiah J. ) In the light of these settled principles the liability to pay estate duty under s. 5 ( 1) of the Act arises upon the death of the real owner and not of the benamidar, who is merely an 05tensible owner. The test Jies in whether upon the death of the benamidar, there would be incidence of liability to estate duty. If the view of the High Court were to be accepted, the estate left by the deceased would escape the duty altogether. We do not see how s.. 6 of the Act comes into play at all in this case. · In view of the finding thrt the shares were purchasea by the defeased benami . in the name of his wife and sons etc. , the real ownership of the property was vested in the deceased was entitled to deal with the same as if it were his own and the benamidars held it in trust under s. 82 of the Trusts Act, 1882 for the benefit of the deceased. The be,namidars, subject to the equities flowing from s.

41 of the Transfer of Property Act, could not deal with the shares in any way. Accordingly, the estate belonged to the deceased who died possessed of the same, and under s. ' 5(1) of the Act the entire value of the shares was includible in the principle va. Jue of the estate of the deceased on his death. For these reasons, the judgment of the High Court is set aside and th,e question is answered in the affirmative and in favour of the Controller of Estate Duty. There s·hall be no order as to costs. N. V. K. Appeal . allowed.