1983 (1) TMI 78 - HC - Income Tax

Summary

Issues:
Interpretation of property passing on death under the Estate Duty Act, 1953 in a joint Hindu family context.

Analysis:
The judgment involves a reference under s. 64(1) of the Estate Duty Act, 1953, where the Tribunal raised questions regarding the property passing on the death of an individual. The deceased, a member of a joint Hindu family, had partitioned the assets with his son and wife. The accountable person claimed that only half of the property passed on the death of the deceased, as the wife was entitled to a share. The Tribunal initially held in favor of the accountable person, stating that the wife was entitled to a share equal to that of her son. This decision was based on the interpretation of property passing under the Act.

The judgment refers to a Full Bench decision in a similar case where it was held that the wife of the deceased was entitled to a share in the joint family estate, which accrued to her at the time of partition. In the present case, the wife had a 1/3rd share in the entire joint family estate at the time of partition, which did not pass on the death of the deceased. The Tribunal, therefore, erred in holding that only half of the property passed on the death, as 2/3rds of the property held by the deceased actually passed on his death.

The accountable person's argument that the deceased kept the share of his wife with him at the time of partition was rejected, as it was not presented before the taxing authorities and was not the basis of the Tribunal's decision. The Tribunal's view that the deceased's share in the joint family property would be one-half was deemed incorrect in light of the Full Bench decision.

In conclusion, the High Court held that two-thirds of the property held by the deceased passed on his death, not just half as determined by the Tribunal. Additionally, the Court clarified that the wife was entitled to a one-third share at the time of the death of the deceased, not a half share as held by the Tribunal. The parties were directed to bear their own costs in the reference.