Jameela Begum, Appellant v. The Controller of Estate Duty, Madras, Respondent.

Estate Duty- Gift by a Mohamedan - Condition of Payment of Income to him during his lifetime and thereafter to his wife during her lifetime- On her death corresponding benefit created to beneficiary- Interest of beneficiary amounted to property and it must be deemed to have passed on him for purpose of Estate Duty.

K.N. Saikia and M. Fathima Beevi JJ.

Mohamedan Law makes a distinction between the corpus of a gift (Ayn) and the usufruct (manafi). A reservation of rights in manafi so long as the ayn is transferred does not render the gift bad.

Stipulations in the settlement by a Mohamedan in the instant case revealed that the settlement conferred absolute right, title and interest in the property on the beneficiary subject to the only obligation of payment of the income from the property to the settler during his lifetime and after his death to his wife, mother of the beneficiary during her lifetime. The settlement and the condition being thus valid and wife of settler having had a charge on the property for realisation of the income only she should be taken to have had interest in the property which ceased on her death, and corresponding benefit created to the accountable person i.e. the beneficiary. The interest of the beneficiary amounted to property as defined in the Estate Duty Act and it must be deemed to have passed under Section 6 of the Act on her death.

(Source: AIR 1991 Supreme Court 414)