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2003 (5) TMI 14 - HC - Income Tax


Issues Involved:
1. Inclusion of wives' shares in determining the share of lineal descendants for estate duty purposes.
2. Application of Section 34(1)(c) of the Estate Duty Act, 1953.
3. Notional partition under Section 39(1) of the Estate Duty Act, 1953.
4. Interpretation of Hindu Succession Act, 1956 in relation to estate duty.

Issue-wise Detailed Analysis:

1. Inclusion of Wives' Shares in Determining the Share of Lineal Descendants for Estate Duty Purposes:
The primary question was whether the interest of the wives of the coparceners should be excluded when determining the share of the lineal descendants for estate duty purposes under Section 34(1)(c) of the Estate Duty Act, 1953. The Tribunal had held that the wives' shares should be excluded, relying on the Calcutta High Court's decision in Satyanarayan Saraf v. Assistant Controller, which stated that the interest of the wives of the coparceners was to be excluded in determining the share of lineal descendants. However, the High Court disagreed, stating that the wife of one of the three sons of the deceased did not have any share in the property of the Hindu undivided family on the notional partition due to the death of the father.

2. Application of Section 34(1)(c) of the Estate Duty Act, 1953:
Section 34(1)(c) mandates that the interests in the joint family property of all the lineal descendants of the deceased member should be aggregated with the property passing on the death of the deceased to determine the rate of estate duty. The High Court emphasized that this provision is concerned with the rate determination of estate duty and not the devolution of the deceased's interest in the joint family property, which is governed by Section 6 of the Hindu Succession Act, 1956.

3. Notional Partition under Section 39(1) of the Estate Duty Act, 1953:
The court examined the concept of notional partition under Section 39(1), which is used to ascertain the principal value of the share in the joint family property that would have been allotted to the deceased had there been a partition immediately before his death. The High Court clarified that the notional partition is confined to the share of the deceased coparcener and does not imply a partition among all coparceners unless they intend to partition their shares.

4. Interpretation of Hindu Succession Act, 1956 in Relation to Estate Duty:
The court referred to Section 6 of the Hindu Succession Act, 1956, which provides that the interest of a male Hindu in coparcenary property devolves by survivorship unless he leaves behind a surviving female relative or a male relative claiming through such female relative. The High Court noted that the wife of a lineal descendant does not have a pre-existing right in the estate except for maintenance and is not entitled to a share on partition unless it takes place between her husband and his sons.

Conclusion:
The High Court concluded that the Tribunal erred in excluding the interest of the wives of the coparceners when determining the share of the lineal descendants for estate duty purposes. The Assistant Controller of Estate Duty had correctly computed the value of the interest of the three lineal descendants by including their shares in the principal value of the estate left by the deceased. The question referred to the court was answered in favor of the Revenue and against the assessee, with no order as to costs.

 

 

 

 

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