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Interpretation of Section 34(1)(c) of the Estate Duty Act regarding the computation of the lineal descendant's share in a Hindu Undivided Family (HUF) property for estate duty assessment. Analysis: The case involved a dispute over the computation of the lineal descendant's share in the HUF property for estate duty assessment under Section 34(1)(c) of the Estate Duty Act. The deceased left behind a wife and three sons, and the Asst. Controller of Estate Duty added 3/5ths share of the lineal descendants in the HUF property. The accountable person contended that the wives of the sons should also be considered in the computation. This contention was upheld by the Tribunal, which determined that only 39.51% of the value of the HUF property should be added, contrary to the 60% adopted by the Asst. Controller of Estate Duty. The High Court analyzed the provisions of Section 34(1)(c) of the Act, which require aggregation of the interests of the lineal descendants in the joint family property. It noted that as per Section 39 of the Act, a notional partition is to be considered, and in this case, the wives of the sons were not entitled to a share in such partition. Therefore, the interest of the lineal descendants in the HUF property should be 3/5ths, as per the statutory provisions, and not 39.51% as determined by the Tribunal. The High Court disagreed with the Tribunal's reliance on a previous decision and clarified that the notional partition is between the deceased and other members of the HUF entitled to a share in the joint family property. The wives of the sons cannot be included in this calculation at that stage. The court emphasized that the aggregation under Section 34(1)(c) should be based on the interest of the lineal descendants in the joint family property as provided by Section 39 of the Act. In conclusion, the High Court ruled in favor of the Department and against the assessee, holding that the computation of the lineal descendant's share should be based on the statutory provisions, resulting in 3/5ths of the value of the HUF property being liable for estate duty assessment. The parties were directed to bear their own costs of the reference.
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