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Issues Involved:
1. Whether the Tribunal was justified in holding that the value of the properties could not be charged to estate duty. 2. Whether the Tribunal was justified in holding that the deceased had no power of disposition over the properties in question of the HUF. Issue-wise Detailed Analysis: Issue 1: Justification of Tribunal's Decision on Estate Duty The Tribunal held that even if the two properties belonged to the Hindu Undivided Family (HUF), the value of the properties could not be charged to estate duty. The accountable person argued that the properties were owned and possessed by the individuals (the deceased's son and wife) with full right of disposition, and the deceased had no power to alienate them. The Assistant Controller, however, found from income-tax records that the income from the two properties was shown in the return of the HUF, concluding that the properties were acquired out of HUF funds and taxed the one-third share accordingly. The Appellate Controller and the Tribunal upheld this decision, applying Section 6 of the Estate Duty Act, which pertains to properties the deceased was competent to dispose of. The Tribunal made this reference on the assumption that even if the property was of the HUF, Section 6 could not be applied as the deceased had no power of disposition over these properties. Issue 2: Power of Disposition by the Deceased The Tribunal held that the deceased, who was the karta of the HUF, had no power of disposition over the properties standing in the names of his wife and son. The Assistant Controller examined the material and concluded that the accountable person failed to correlate the investments with the purchase of the properties. The Appellate Controller did not examine the facts or come to a positive finding about the acquisition of the properties but applied decisions from previous cases, concluding that the deceased was not competent to dispose of the properties, thus they could not be included in the estate. The Tribunal, instead of determining the disputed question of fact about the acquisition of the property, started with an assumption and did not provide a finding of fact. Legal Analysis: Section 5 of the Estate Duty Act is the charging section, which provides for the charging of estate duty upon the principal value of the property of the deceased. Sections 6 and 7 are deeming provisions that bring in property deemed to pass on the death of the deceased. Section 6 applies to properties the deceased was competent to dispose of, while Section 7 applies to properties in which the deceased had an interest ceasing on his death. The competent authority must determine the facts necessary for the application of these provisions. The Assistant Controller found that the properties were impressed with the character of HUF properties based on income-tax returns. The Appellate Controller and the Tribunal assumed the properties were HUF properties and applied Section 6, concluding the deceased was not competent to dispose of them. However, the Tribunal did not go into the question of fact about the acquisition of the property, which is necessary to determine the application of Section 7. Conclusion: The court found that the Tribunal did not provide sufficient findings of fact to determine the application of Sections 6 or 7 of the Estate Duty Act. The court directed the Appellate Tribunal to submit an additional statement of case indicating their determination of the question about the acquisition of the property. The court emphasized that if the statement of case is not complete, it could direct the Tribunal to send an additional statement of case. The parties were directed to bear their own costs for the present proceedings.
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