1984 (4) TMI 83 - AT - Income Tax

Summary

Issues:
Dispute over addition of property deemed to pass on the death of deceased under Estate Duty Act.

Analysis:
The estate duty appeal revolved around the addition of Rs. 22,630 as property deemed to pass on the death of the deceased, Smt. Urmila Vaid, under section 9 read with section 27 of the Estate Duty Act, 1953. The Assistant Controller added this sum in relation to the relinquishment of the deceased's share in a partial partition of the Hindu Undivided Family (HUF), treating it as a disposition akin to a gift. The Assistant Controller concluded that the partial partition, where the deceased was not allotted any share, constituted an unequal partition, relying on legal precedents. The Appellate Controller upheld this decision, prompting the appeal to the Tribunal.

The accountable person argued that there was no gift by the deceased, contending that the partial partition only involved movable assets and that the deceased had agreed not to receive any share in consideration of her husband providing maintenance. The revenue, however, relied on legal precedents to support the addition made by the Assistant Controller.

The Tribunal analyzed the memorandum of partial partition and concluded that it was a case of partial partition of certain movable assets, not a complete partition of all assets. The Tribunal highlighted that the deceased's agreement not to receive a share in consideration of maintenance provided by her husband constituted full consideration for any alleged disposition. The Tribunal emphasized that the value of the right to maintenance was equal to or more than the alleged foregone share, leading to the exclusion of the amount from being deemed a gift. Consequently, the Tribunal deleted the addition of Rs. 22,630 from the deceased's estate.

Moreover, the Tribunal referenced a Bombay High Court decision that supported the accountable person's case and emphasized that the deceased's right to an equal share in the HUF properties was not impaired. The Tribunal also considered the alternative submission that only a one-twelfth share, not one-third, should be included under section 27 read with section 9, but this line of enquiry was unnecessary due to the main contention being accepted.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the accountable person and deleting the addition of Rs. 22,630 from the deceased's estate.