1981 (4) TMI 70 - HC - Income Tax

Summary

Issues:
1. Inclusion of National Savings Certificates and Postal Cash Certificates in deceased's estate.
2. Interpretation of will regarding ownership of certificates.
3. Applicability of E.D. Act on the certificates purchased in the names of minor sons.

Analysis:
The case involved the question of whether the value of National Savings Certificates and Postal Cash Certificates purchased by the deceased in the names of his minor sons should be included in his estate. The deceased had left a will stating his intention to bequeath these certificates to his sons. The Asst. Controller included the entire value of the certificates in the estate, considering the sons as benamidars. The Appellate Controller and Tribunal upheld this decision, leading to an appeal before the High Court.

The Tribunal relied on the decision of the Allahabad High Court in a similar case and held that since the deceased had not obtained any release from the benamidars or a court declaration, he remained incompetent to transfer the certificates until his death. Therefore, the Tribunal excluded the value of the certificates from the deceased's estate. However, the High Court, referring to a Supreme Court decision, concluded that the deceased was the real owner of the certificates and they were liable to duty under the E.D. Act, 1953. Consequently, the High Court ruled in favor of the revenue authorities, stating that the certificates should be included in the deceased's estate for taxation purposes.

In summary, the judgment clarified that the National Savings Certificates and Postal Cash Certificates purchased by the deceased in the names of his minor sons were to be considered part of his estate for estate duty assessment, as he was deemed the actual owner of the certificates. The interpretation of the will and the application of the E.D. Act were crucial in determining the inclusion of these certificates in the deceased's estate.