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Issues involved:
1. Computation of the value of properties held by a Hindu Undivided Family (HUF) under section 39 of the Estate Duty Act, 1953. Detailed Analysis: The judgment in question revolves around the computation of the value of properties held by a HUF under section 39 of the Estate Duty Act, 1953. The deceased individual was a member of the HUF, and the issue arose regarding the inclusion of a gift made by the family within two years of the deceased's death in the valuation of the HUF's assets. The Assistant Controller contended that the gift should be included, while the Appellate Controller held that only gifts made by the deceased individual should be considered under section 9 of the Act, as the HUF is a separate legal entity. Consequently, the inclusion was deleted based on this reasoning (para 2). The department appealed the decision, arguing that section 39(3) creates a legal fiction where the properties of the HUF are deemed to belong to the deceased individual. The department contended that all provisions of the Act, including section 9, should be applied in this context. The department relied on legal commentary supporting this interpretation. However, the Tribunal analyzed section 39 in detail. It clarified that while the legal fiction created by section 39(3) is meant for estimating the principal value of the joint family property, it does not extend to invoking provisions deeming properties to pass, as those are contained in different sections of the Act (para 3-5). The Tribunal further considered a revised opinion of a legal author, which emphasized that the legal fiction under section 39(3) should be limited to treating the entire family properties as belonging to the deceased for valuation purposes only. The opinion highlighted that gifts made prior to the death should not be included in the valuation process. The Tribunal concurred with this view, stating that provisions deeming properties to pass should not be utilized while computing the principal value of the HUF's properties (para 6). In conclusion, the Tribunal dismissed the departmental appeal, holding that the provisions deeming properties to pass should not be invoked when determining the cessor of interest in the valuation of the HUF's properties under section 39 of the Estate Duty Act, 1953 (para 7).
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