1. The Board constituted under Section 4, Estate Duty Act, 1953, has referred the following question under Section 64(1) of that Act (as it stood prior to its amendment in 1958) for the opinion of this court:

" Whether, on the facts and in the circumstances of the case, the value of the haveli was correctly included in the principal value of the estate of the deceased, as the value of property deemed to pass on his death under Section 10 of the Act ?"

2. Mohd. Obedulla Khan died on March 7, 1958. On his death his widow, Bibi Ahmadi Begum, as the accountable person under Section 53 of the Act, filed an account of the properties comprised in the estate of the deceased. The net value of the estate was assessed at Rs. 40,025. The Assistant Controller of Estate Duty, Meerut, determined the principal value of the estate passing on the death of the deceased at Rs. 7,99,474 and the estate duty payable thereon at Rs. 1,11,144.80. Among other properties it included the value of a haveli in village Udaipur Kalan at Rs. one lakh. He found that the property had been gifted by the deceased to the accountable person in 1918, but the deceased continued to live there till the time of his death in the same manner after the gift as he was living before the gift. He held that the provisions of section 10 of the Act were attracted and that, therefore, the property must be deemed to have passed on the death of the deceased. The accountable person appealed to the Board under Section 63 of the Act. Before the Board it was pointed out that while the property was gifted by the deceased to the accountable person in the year 1918, it was later transferred by the accountable person to a wakf-ul-aulad on July 10, 1922. It was admitted that the deceased continued to stay in the house but, it was urged, his residence there was as a mere licensee and it could not be said that the deceased was enjoying any benefit from the property. It was also pointed out that the donee had parted with the gifted property in favour of the wakf. Upon these considerations it was said that the provisions of section 10 were not attracted.

3. The Board found that the deceased continued to live in the house even after the gift and at no time was he completely excluded from the gifted property. It accordingly confirmed the inclusion of the property in the estate of the deceased. At the instance of the accountable person this reference has been made now.

4. Three contentions have been raised before us on behalf of the accountable person. The first contention is that property taken under a gift cannot be deemed to pass on the donor's death where the donor continues in possession merely by reason of the circumstance that he is the husband of the donee. It is urged that the continued residence of the donor is referable not to any proprietary right in the property but merely to the relationship of husband and wife between the donor and the donee.

5. Section 10 of the Act, as it stood at the relevant time, provided:

" 10. Gifts whenever made where donor not entirely excluded. 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 :

Provided that the property shall not be deemed to pass by reason only that it was not, as from the date of the gift, exclusively retained as aforesaid, if, by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the donor or of any benefit to him for at least two years before the death. "

6. There is no dispute that the proviso to Section 10 does not come into play in this case. The question is whether upon a proper construction of the parent provision in section 10 it is possible to say that inasmuch as the donor and the donee were related to each other as husband and wife the entire exclusion of the donor from the property gifted is contemplated by the terms of Section 10.

7. It is not necessary to examine in detail the conflict of judicial opinion between the courts elsewhere in regard to the correct interpretation of a provision such as Section 10. But brief reference may be made to two cases. In Attorney-General v. Seccombe, [1911] 2 K.B. 688; 1 E.D.C. 589 (K.B.) Hamilton J. took the view that property could not be deemed to pass under such a provision unless the donor was entitled to reside in the property under a legally enforceable arrangement. The Privy Council, however, in Chick v. Commissioner of Stamp Duties, expressed a different opinion. Construing a similar provision of a New South Wales statute, the Judicial Committee held that property would be deemed to pass even where the donor possessed or enjoyed it without any legally enforceable right to sustain him. So far as we are concerned, the Supreme Court in George Da Costa v. Controller of Estate Duty, [1967] 63 I.T.R. 497, 503 ; [1967] 1 S.C.R. 1004 (S.C.) has, while preferring the view taken in Chick case, pointed out that the second part of Section 10 has two limbs : the deceased must be entirely excluded (i) from the property, and (ii) from any benefit of contract or otherwise. After examining the case law on the point it 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 he 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.' (Viscount Simonds in Chick v. Commissioner of Stamp Duties, New South Wales, [ 1958] A.C. 435; [ 1959] 37 I.T.R. (E.D.) 89 ; 3 E.D.C. 915 (P.C.).)."

8. Therefore, the absence of a legally enforceable right forming the basis of or supporting the continued occupation or enjoyment of the property by the donor does not affect the operation of Section 10. To bring the case within the mischief of Section 10 it suffices that the donor occupies or enjoys the gifted property. The single fact to be determined, in the felicitous language of Viscount Simonds, is whether the donor has been entirely excluded from the subject-matter of the gift.

9. But it has been urged on behalf of the accountable person that the law laid down by the Supreme Court in George Da Costa cannot apply to the case before us where the donor and the donee were related as husband and wife and it was only natural that the husband should continue to reside with the wife. We are referred to the decision of the Calcutta High Court in Mrs. Shamsun Nehar Mansur v. Controller of Estate Duty, [1969] 71 I.T.R. 301, 308 (Cal.). That was also a case where the property was found to have been gifted by the husband to his wife and on the death of the husband the revenue sought to include the property in the estate of the deceased by virtue of Section 10 for the purpose of estate duty. The learned judges in that case were impressed by the consideration that when the husband continued to occupy or enjoy the property along with the wife after the gift was made he did so not by virtue of any proprietary right in the property but by reason of the relationship existing between them. Construing Section 10, it was observed :

But the significant point for decision in the present reference before us is, does this involve or affect the marital right of a husband for coverture and consortium with the wife only on the ground that the husband had made a gift to his wife of a house where she lives ? The plain contention of the counsel for the revenue is that once a husband has made a gift of a house to his wife, he cannot go to that house any more for any purpose. We feel it a little difficult to accept such an unqualified submission. The language and the words of Section 10 of the Estate Duty Act quoted above indicate that it is the possession and enjoyment of the property which are the target. If they are not immediately assumed by the donee and if the donor is not entirely excluded from them, it is then that the property will be deemed to pass on the death of the donor within the meaning of Section 10 of the Estate Duty Act. But then it is the proprietary right. We have already stated as a fact in this case that the title deed or the deed of conveyance reserves no right for the husband and not even mentions his name. There is in fact no contractual or other right in law or in equity in respect of the property, or its use and enjoyment in favour of the husband. When a husband goes to his wife for coverture or consortium, he does not go to the property but goes to the wife. In such a case the husband's going to the house is not making use of or enjoying the property in question. It is this proprietary element in respect of the house gifted which must be emphasised and borne in mind in applying the principles laid down by the Supreme Court in Da Costa's case. These considerations are more vitally germane to the case of a husband and wife than normally to a case of parents and their sons.

10. With great respect to the learned judges, it is difficult to accept the reasoning adopted by them. The only question is whether the property gifted attracts estate duty. If the husband gifts the house to his wife he does not lose the wife by reason of the gift. All that happens is that if he continues to reside in the house, the house becomes liable to inclusion in his estate after his death for the purposes of estate duty. If "the eye need look no further " than to see whether the donor has been excluded from the subject-matter of the gift, the nature of the relationship between the donor and the donee, be it husband and wife or father and son, can make no difference. It seems to us that the principle laid down in George Da Costa extends to all cases and is not limited by reference to the peculiar personal relationship between the donor and the donee. Whether the continued residence of the donor in the property was in the exercise of a proprietary right or because of a personal relationship between the parties or for any other reason is a matter wholly immaterial to the application of Section 10. At this stage we may point out that in Mrs. Shamsun Nehar Mansur, the learned judges also attached great weight to the circumstance that in the case before them it had not been proved that the husband had made a gift of the house to the wife. That circumstance, it appears, was of material influence in persuading them to distinguish George Da Costa.

11. The accountable person also relies on Gopisetti Chandramouli v. Controller of Estate Duty, [1969] 74 I.T.R. 439 (A.P.). In that case the Andhra Pradesh High Court adopted the same view as the Calcutta High Court upon considerations substantially similar.

12. In our opinion, Section 10 includes a case where property v as gifted by a husband to his wife and the husband continued to occupy or enjoy it, not on the basis of any legally enforceable right but merely because of the personal relationship between them. In that opinion, we are supported by the decision of this court in Abbas Ali Meerza v. Controller of Estate Duty, [1970] 78 I.T.R. 759 (All.).

13. Upon this construction of Section 10, it would appear that the provision operates harshly in those cases where a house is gifted by one member of the family to another. Apparently to reduce its severity, the Finance Act, 1965, has since inserted the following further proviso in Section 10 :

" Provided further that a house or part thereof taken under any gift made to the spouse, son, daughter, brother or sister, shall not be deemed to pass on the donor's death by reason only of the residence therein of the donor except where a right of residence therein is reserved or secured directly or indirectly to the donor under the relevant disposition or under any collateral disposition."

14. This amendment was made effective from April 1, 1965, and operates prospectively.

15. The next contention on behalf of the accountable person is that Section 10 cannot be invoked because the property was subsequently transferred by the donee under a wakf-ul-aulad. It seems to us that the subsequent transfer of the property can make no difference to the application of Section 10. On the plain language of that section what is relevant is that the donor has not been excluded entirely from the possession or enjoyment of the property. To escape the operation of Section 10, upon the property being gifted, bona fide possession and enjoyment of it must be immediately assumed by the donee and thenceforward such possession and enjoyment should be retained to the entire exclusion of the donor. Nowhere does Section 10 contemplate the exclusion of the donor only so long as the donee is the owner of the property. The essence of Section 10 is the entire exclusion of the donor from the property ever since he made a gift of it. As from the date of the gift, no advantage should flow to him from the property either by way of possession or enjoyment of that property or by contract or otherwise. We are satisfied that the mere circumstance that the donee subsequently made the property the subject of a wakf will not preclude (ho application of Section 10 if the donor continues to reside in the property.

16. During the hearing of this case, it was urged on behalf of the revenue that the haveli had not in fact been made the subject of the wakf. As that is a question of fact and does not seem to have been raised before the Tribunal, we do not propose to enter into it at this stage. The Board appears to have proceeded on the basis that the haveli was in fact included in the wakf properties, and we must also proceed on that basis.

17. We answer the question referred in the affirmative. The Controller of Estate Duty is entitled to his costs, which we assess at Rs. 200. Counsel's fee is assessed in the same figure.