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Issues Involved:
1. Inclusion of Rs. 1,27,653 in the principal value of the estate of the deceased. 2. Inclusion of Rs. 10,663 in the principal value of the estate of the deceased. Issue-Wise Detailed Analysis: 1. Inclusion of Rs. 1,27,653 in the Principal Value of the Estate of the Deceased: Facts: - Govinda Reddiar and his three sons executed a partition deed on 7th May 1960. - Under the partition, Govinda Reddiar was allotted the family bungalow in Saidapet. - Clause 3 of the partition deed stated that if the property was acquired by the Government during Govinda Reddiar's lifetime, the compensation would be divided into four equal shares. - A notification under section 4(1) of the Land Acquisition Act was published on 23rd May 1962, and an award was passed on 29th July 1963, after Govinda Reddiar's death on 5th June 1963. Legal Analysis: - Section 7 of the Estate Duty Act: Property in which the deceased had an interest ceasing on death is deemed to pass on his death. - The Tribunal's view was that only one-fourth share in the compensation amount was includible as the property was joint family property. - The Court held that the acquisition took place after Govinda Reddiar's death, so the contingency of dividing the compensation did not materialize during his lifetime. - The deceased continued to have a life interest in the property until his death, making the entire value of Rs. 1,27,653 includible under section 7 read with section 40 of the Estate Duty Act. Conclusion: - The Court concluded that the entire compensation amount of Rs. 1,27,653 was dutiable as the deceased had a life interest in the Saidapet property which ceased on his death. 2. Inclusion of Rs. 10,663 in the Principal Value of the Estate of the Deceased: Facts: - The property known as Reddithottam was allotted to Govinda Reddiar under the partition deed, with a life interest for him. - The property was acquired during his lifetime, and an award of Rs. 10,662.90 was made on 14th September 1962. Legal Analysis: - Section 11 of the Estate Duty Act: If an interest ceasing on death is disposed of within two years before death, the property is deemed to pass. - The Tribunal held that the conduct of the parties evidenced a modification of the arrangement regarding this property. - The Court held that the compensation amount for Reddithottam was dutiable as the deceased's life interest extended to the compensation amount. - The compensation was divided within the statutory period of two years before the deceased's death, attracting section 11(1)(b) of the Estate Duty Act. Conclusion: - The Court concluded that the sum of Rs. 10,663 was dutiable as the deceased's life interest in the Reddithottam property extended to the compensation amount, and the distribution occurred within the statutory period. Final Judgment: - Both questions were answered in the negative and against the accountable person. - The inclusion of both amounts, Rs. 1,27,653 and Rs. 10,663, in the dutiable estate of the deceased was upheld. - The Controller of Estate Duty was awarded costs, with counsel fees of Rs. 250.
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