1988 (8) TMI 144 - AT - Income Tax

Issues Involved:

1. Determination of the principal value of the estate of the deceased.
2. Inclusion of the deceased's interest in the Wakf properties in the estate duty assessment.
3. Valuation of the deceased's interest in the Wakf properties.
4. Determination of the deceased's share in the estate.
5. Valuation of certain properties and assets, including lands and the Rahman Nagar Tea Estate.

Issue-wise Detailed Analysis:

1. Determination of the Principal Value of the Estate of the Deceased:

The appeal by the accountable person challenges the order of the Appellate CED, who substantially sustained the order of the ACED. The ACED assessed and determined the principal value of the estate of the deceased, Late Amber Ali Barlaskar, who died on April 10, 1965. The Asstt. Controller treated 13 persons as accountable, including the deceased's sons and daughters. The deceased left behind considerable movable and immovable properties and was a beneficiary and Mutawalli of two Wakfs created by his father. The Asstt. Controller computed the total value of the principal estate at Rs. 2,87,785, including the deceased's interest in the Wakf estates.

2. Inclusion of the Deceased's Interest in the Wakf Properties in the Estate Duty Assessment:

The Appellate CED noted that the deceased had a 43/256 and 23/128 share of interest in the two Wakf estates, respectively. The deceased enjoyed the share of income from these estates and was a Mutawalli at the time of his death. The Appellate CED sustained the inclusion of the deceased's interest in the Wakf properties in the estate duty assessment. The accountable person contended that the deceased was merely a manager of the Wakf properties and that the income receivable by the deceased did not devolve on his death to other beneficiaries.

3. Valuation of the Deceased's Interest in the Wakf Properties:

The Appellate Controller modified the valuation of some properties and directed the Asstt. Controller to adjust the assessment accordingly. The accountable person argued that the authorities wrongly included the value of the deceased's interest in the Wakf properties, as these properties were dedicated to God and not liable to estate duty. The Tribunal examined the Wakf deed and concluded that the deceased's interest in the Wakf properties passed on his death and was includible in the estate.

4. Determination of the Deceased's Share in the Estate:

The accountable person argued that the authorities below were not justified in taking a high value of the properties for inclusion. The Tribunal noted that the CIT(A) had dealt with this point but had not made much discussion before rejecting the claim. The Tribunal restored this aspect to the file of the ACED for ascertaining the basic facts and determining whether the deceased's share should be 1/4th or 1/7th. The Asstt. Controller was directed to consult the IT assessment records and give the accountable person an opportunity of being heard.

5. Valuation of Certain Properties and Assets, Including Lands and the Rahman Nagar Tea Estate:

The accountable person contended that the authorities wrongly valued some lands at Silcar and the properties in Wakf estate No. 2. The Tribunal found no justification to interfere with the Appellate Controller's order on this point. Regarding the balance-sheet of Rahman Nagar Tea Estate, the Tribunal restored this point to the file of the Assistant Controller to ascertain the basic facts and dispose of the matter afresh after giving the accountable person a reasonable opportunity of being heard.

Conclusion:

The Tribunal concluded that the value of the deceased's interest in the Wakf properties passed on his death and was includible in the estate. The Tribunal partly allowed the appeal for statistical purposes, directing the ACED to re-examine certain aspects, including the deceased's share in the estate and the valuation of the Rahman Nagar Tea Estate.

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