1980 (3) TMI 55 - HC - Income Tax

Summary

Issues:
1. Inclusion of compensation payable to the widow in the estate of the deceased for estate duty assessment.
2. Interpretation of Section 27 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952.
3. Determination of whether maintenance allowance constitutes property passing on the death of the deceased for estate duty.

Detailed Analysis:
1. The case involved a reference under Section 64(1) of the Estate Duty Act, 1953, concerning the inclusion of compensation payable to the widow in the estate of the deceased for estate duty assessment. The deceased was a jagirdar whose jagir was resumed under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952. The issue was whether the compensation receivable by the widow, as maintenance, should be included in the total value of the deceased's estate for estate duty assessment. The Tribunal held that the commuted value of the maintenance allowance payable to the widow could not form part of the dutiable estate of the deceased.

2. The interpretation of Section 27 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 was crucial in this case. Section 27 allows for the payment of maintenance allowance to individuals entitled to receive it under any existing jagir law out of the compensation payable to the jagirdar. The Jagir Commissioner determines the persons entitled to receive maintenance allowance under this section. The Tribunal upheld that the maintenance allowance allowed to the widow was payable under the provisions of Section 27 and could not be challenged under the Estate Duty Act.

3. The determination of whether the maintenance allowance constitutes property passing on the death of the deceased for estate duty was pivotal. The Court held that the amount allowed to the widow as maintenance under Section 27 was not a property passing into her hands on the death of the deceased. The maintenance allowance was considered a personal allowance, not subject to succession or inheritance. It was clarified that the maintenance allowance was payable even during the lifetime of the jagirdar and was not part of the property passing on the death of the deceased for estate duty assessment. Therefore, the Tribunal's decision to exclude the maintenance allowance from the dutiable estate was upheld.

In conclusion, the Court affirmed that the maintenance allowance payable to the widow, as determined under Section 27 of the Act, was rightly held to be not includible in the estate of the deceased for estate duty assessment. The decision was based on the interpretation of relevant provisions and the nature of the maintenance allowance as a personal allowance, not forming part of the property passing on the death of the deceased.