1985 (7) TMI 134 - AT - Income Tax

Summary

Issues: Valuation of jewellery, aggregation of lineal descendants share, mechanism for ascertaining share, exclusion of wives' share, imposition of interest under r. 42 of Estate Duty Rules

Valuation of Jewellery:
The appeal before the Appellate Tribunal ITAT Bangalore involved the estate of a deceased individual, late Bhanwarlal. The primary issue in dispute was the valuation of jewellery in the estate. The accountable person argued that the valuation should be based on rates provided by the Jewellers Association, while the authorities had used the rate as of 31st Dec., 1979. The Tribunal ruled in favor of the accountable person, directing that the jewellery should be valued based on the rates as certified by the Jewellers Association on the date of death.

Aggregation of Lineal Descendants Share:
Another point of contention was the aggregation of lineal descendants' share in the Hindu Undivided Family (HUF) property. The accountable person contended that no such aggregation could be made, but this argument was rejected by the Tribunal citing decisions of the High Court against the accountable person. Additionally, the accountable person argued that there was no mechanism for ascertaining the share of lineal descendants. However, the Tribunal pointed out that section 39 provided the means for ascertaining the share of lineal descendants, and the charge on their share was imposed by section 34(1)(c) read with section 5.

Exclusion of Wives' Share:
The accountable person further contended that the share falling to the wives of the sons should be excluded when aggregating the share of lineal descendants. The Tribunal referred to conflicting decisions but resolved the issue by relying on Supreme Court decisions. It held that in a total partition, the shares of the wives of the sons must be provided for, as they are entitled to a share under the Hindu Succession Act. As the wives are not lineal descendants, their shares cannot be aggregated under section 34(1)(c) of the Estate Duty Act.

Imposition of Interest under Rule 42:
The final ground of dispute related to the imposition of interest under Rule 42 of the Estate Duty Rules. The Tribunal found that the Assistant Controller had not provided a detailed explanation for imposing interest. Therefore, it directed the Assistant Controller to reconsider the matter while recomputing the principal value of the estate.

Conclusion:
In conclusion, the appeal was treated as allowed by the Appellate Tribunal ITAT Bangalore. The Tribunal provided detailed reasoning and directions on the valuation of jewellery, aggregation of lineal descendants' share, exclusion of wives' share, and the imposition of interest under Rule 42 of the Estate Duty Rules. The judgment addressed each issue comprehensively, relying on legal provisions and precedents to reach its decision.