1994 (11) TMI 106 - HC - Income Tax

Summary

Issues:
1. Whether the amount arising from a refund due to appellate orders passed after the deceased's death forms part of the estate passing on her death.
2. Whether the refund accrued before or after the death of the deceased.
3. Whether the amount of refund is liable to be included in the deceased's estate for the purpose of estate duty.

Analysis:
The judgment pertains to an application filed under section 64(3) of the Estate Duty Act, 1953, regarding the inclusion of a refund amount in the estate of the deceased. The deceased, H. H. Sethu Parvati Bai, passed away on August 4, 1983. The Assistant Controller included the refund amount resulting from appellate orders post her death in her estate, considering it as property passing on death. The Appellate Controller remitted the matter back to determine if the refund accrued before or after the death. The Tribunal later held that the refund did not accrue to the deceased before her death, leading to its exclusion from the assessment.

The High Court rejected the application for compelling reference of questions of law, stating that the answer was self-evident. It emphasized that only the principal value of property passing on death is assessable to duty. Refunds ordered post the deceased's death do not constitute property passing on death, as established in previous cases like CED v. Maharani Raj Laxmi Devi and Estate of Late Gen. Sir Shankar S. S. J. B. Rana v. CED. The court highlighted that the right to claim a refund, contingent on uncertain future events like the outcome of pending appeals, does not amount to tangible property available at the time of death.

Consequently, the court affirmed that the refund amount was not property passing on the deceased's death and thus not subject to estate duty inclusion. The Tribunal's decision to exclude the refund from the assessment was deemed justified. The court concurred with the legal principles established in previous judgments and dismissed the petition, finding no referable question of law in the matter.