1977 (3) TMI 59 - AT - Income Tax

Summary

Issues:
Division of joint family properties for estate duty assessment.

Analysis:
The case involved a dispute regarding the division of joint family properties for estate duty assessment after the death of the deceased, M.R. Raghupathy Gowda. The accountable person claimed that the properties passing under section 5 of the Act should be determined without aggregating the lineal descendants' share in the joint family properties with those of the deceased. The Assistant Controller of Estate Duty determined that a partial partition took place in the family, and only the money lending business assets were divided among the father and four sons. The Appellate Controller upheld this decision.

The learned counsel for the assessee argued that there was a division in status in the family, and except for the joint family business, the other properties were enjoyed by the family members as tenants in common. They presented an agreement dated 31st March, 1969, and referred to relevant legal texts to support their contention. On the other hand, the revenue relied on the lower authorities' orders, claiming there was no actual division in the family's status.

Upon careful consideration of the agreement and legal principles, the tribunal found that the family members had decided to sever the joint status from 31st March, 1969. The joint business capital was divided among the members, while other properties remained joint until further division. The tribunal referenced legal texts to support the conclusion that when properties are held as tenants-in-common, the family cannot be assessed in the status of a Hindu undivided family. Therefore, the tribunal accepted the accountable person's contention and directed that only the deceased's 1/5th share in the immovable properties should be considered for assessment, without aggregating the lineal descendants' share.

In conclusion, the tribunal allowed the appeal, ruling in favor of the accountable person regarding the division of joint family properties for estate duty assessment.