9911796707
|
Home
Issues Involved:
1. Whether the lineal descendants' share can be clubbed for rate purposes under Section 34(1)(c) of the Estate Duty Act. 2. Whether the addition of Rs. 15,000 towards wells and pumpsets is justified. Issue-wise Detailed Analysis: 1. Lineal Descendants' Share and Section 34(1)(c): The accountable person argued that there was no joint family (HUF) at the time of the deceased's death on 14th March 1977. They contended that the joint family had been disrupted due to partial partitions on 31st March 1961 and 29th March 1972. The partial partition of 1961 divided movable assets among the deceased and his five sons, while the 1972 partition divided immovable properties. The accountable person claimed that these partitions evidenced severance in status, and the properties still held jointly were enjoyed as tenants-in-common, not as joint family properties. They further argued that Section 34(1)(c) of the Estate Duty Act, which allows for aggregation of lineal descendants' share for rate purposes, had been declared unconstitutional by the Madras High Court in Smt. Devaki Ammal vs. CED and CED vs. R.K. Chettiar, and the Supreme Court had dismissed the SLP against these decisions. The departmental representative countered that the HUF continued to exist, evidenced by a wealth-tax return filed on 31st March 1977 by the major HUF, which included agricultural lands valued at Rs. 3,30,000. They argued that the Andhra Pradesh High Court had upheld the constitutionality of Section 34(1)(c) in several decisions, such as N. Krishnaprasad vs. ACED, Smt. Komanduri Seshamma vs. Appellate Controller of Estate Duty, and N.V. Somaraju vs. Government of India & Ors. The representative asserted that the Tribunal should follow the Andhra Pradesh High Court's rulings, which are binding within its jurisdiction. The Tribunal, after considering the arguments and documents, concluded that the partial partitions indicated a clear severance in status. The Tribunal noted that the terms "joint properties" used in the partition agreements suggested that the properties were held as tenants-in-common. They referenced a Full Bench decision of the Delhi High Court in CED vs. Suresh Chander, which supported the view that severance in status leads to properties being held as tenants-in-common. The Tribunal held that Section 34(1)(c) was constitutional but found that the accountable person's contention that no HUF existed at the time of death was correct. Therefore, the appeal on this ground was allowed. 2. Addition of Rs. 15,000 Towards Wells and Pumpsets: The accountable person argued that the agreed value of Rs. 3,96,000 for the agricultural lands included the value of wells and pumpsets. They pointed out that the wealth-tax assessment for the year 1977-78 valued the agricultural lands at Rs. 3,30,000, and the higher value agreed upon for estate duty purposes was due to the inclusion of wells and pumpsets. The Tribunal found this argument convincing. They noted that the value of the agricultural lands should be taken as on 14th March 1977, and the agreed value of Rs. 3,96,000 likely included the wells and pumpsets. Therefore, the Tribunal concluded that the addition of Rs. 15,000 was unjustified and should be deleted. They directed the Assistant Controller to rectify the assessment order accordingly. Conclusion: The appeal was allowed on both grounds. The Tribunal held that the lineal descendants' share should not be aggregated for rate purposes under Section 34(1)(c) due to the severance in status evidenced by the partial partitions. Additionally, the addition of Rs. 15,000 towards wells and pumpsets was deemed unjustified and was deleted.
|
