2001 (2) TMI 132 - SC - Income Tax

Whether, on the facts and in the circumstances of the case, the value of the agricultural lands settled by the deceased in favour of his wife, including those lands which the lady settled in favour of her relatives, from out of the lands received by her, could be included in the principal value of the estate passing on the death of the deceased? Held that - It is evident from the judgment and order of the High Court as in the affirmative and in favour of the Revenue that it has not construed documents but has reached a conclusion, upon reappraisal of the evidence of the transactions that was placed before the Tribunal and analysed by the Tribunal, different from that reached by the Tribunal. The Tribunal is the final fact-finding authority. The High Court may not enter into the realm of fact unless the party seeking a reference has successfully proposed a question that suggests that the conclusion reached by the Tribunal is perverse; in other words, that no person could reasonably have reached it upon the mate rial placed before him. There was no question before the High Court which suggested that the conclusion reached by the Tribunal was perverse. It was, therefore, not open to the High Court to go into the questions of fact. Upon that basis alone, the judgment and order under appeal must be set aside and the question answered in the negative and in favour of the appellant.

Summary

Issues:
1. Inclusion of agricultural lands settled by the deceased in favor of his wife in the principal value of the estate.
2. Inclusion of properties settled by the deceased on his five settlees in the principal value of the estate.
3. Inclusion of agricultural lands received by the deceased through settlement in the principal value of the estate.

Analysis:

Issue 1:
The High Court considered whether the agricultural lands settled by the deceased in favor of his wife, including those later settled by the wife in favor of her relatives, should be included in the principal value of the estate. The Tribunal had initially held that the lands gifted to the wife by the deceased should be regarded as belonging to her, as they had gone out of the deceased's possession. The Tribunal found the settlements to be genuine and legally effective, with possession and enjoyment transferred to the wife and her relatives to the exclusion of the deceased. However, the High Court, upon reappraisal of the evidence, reached a different conclusion, contrary to the Tribunal's findings. The Supreme Court emphasized that the Tribunal is the final fact-finding authority, and the High Court should not interfere with factual determinations unless the Tribunal's conclusion is deemed perverse, which was not the case here. Consequently, the judgment under appeal was set aside, and the issue was decided in favor of the appellant.

Issue 2:
Regarding the properties settled by the deceased on his five settlees, the Tribunal had similarly found the settlements to be genuine and effective, with possession and enjoyment transferred to the settlees to the exclusion of the deceased. The High Court, however, reached a different conclusion upon reassessment of the evidence, which the Supreme Court determined was beyond its purview. The Court reiterated that the High Court should not delve into factual matters unless a question of perversity is raised, which was not the case here. Therefore, the judgment under appeal was overturned, and the issue was decided in favor of the appellant.

Issue 3:
The question of including agricultural lands received by the deceased through settlement in the principal value of the estate was also considered. The Tribunal had found the settlements to be genuine and legally effective, with possession and enjoyment transferred to the beneficiaries to the exclusion of the deceased. However, the High Court disagreed with the Tribunal's findings based on its reassessment of the evidence. The Supreme Court reiterated that the High Court should not interfere with factual determinations unless a question of perversity is raised, which was not the case here. Consequently, the judgment under appeal was set aside, and the issue was decided in favor of the appellant.

In conclusion, the Supreme Court allowed the civil appeals, setting aside the judgment and order of the High Court, and ruled in favor of the appellant on all the issues discussed.