1986 (4) TMI 132 - AT - Income Tax

Summary

Issues Involved:
1. Market value estimation of the HUF property.
2. Deduction for marriage and maintenance expenses of the unmarried daughter.

Detailed Analysis:

1. Market Value Estimation of the HUF Property:
The first issue in the appeal concerns the market value estimation of the HUF property situated at Anand Niketan, New Delhi. The accountable person disclosed the value at Rs. 2,89,000, while the Assistant Controller estimated it at Rs. 3,08,361. The Tribunal noted that the difference between the disclosed value and the estimated value was insignificant. Given the nature of property valuation, which often involves estimations and the absence of any wide variation or principle of valuation being at issue, the Tribunal decided not to interfere with the valuation taken by the department. The ground was thus rejected.

2. Deduction for Marriage and Maintenance Expenses of the Unmarried Daughter:
The second issue pertains to the deduction of Rs. 86,750 claimed for the marriage and maintenance expenses of the unmarried daughter, which was disallowed by the Assistant Controller and the Appellate Controller. The accountable person argued that the property passing or deemed to pass on the deceased's death should account for the provision of marriage and maintenance expenses of the unmarried daughter, as per articles 304 and 440 of Mulla's Hindu Law and the Supreme Court decision in Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum.

The Tribunal examined sections 7(1) and 39(1) of the Estate Duty Act, 1953, which mandate that the value of the deceased's share in the joint family property should be determined as if a partition had occurred immediately before the death. This involves considering all claims, including those for marriage and maintenance expenses of unmarried daughters.

The Tribunal referenced articles 304 and 440 of Mulla's Hindu Law, which state that the property available for partition must account for joint family debts, personal debts of the father, maintenance of dependent female members, and marriage expenses of unmarried daughters. The Tribunal found that the Andhra Pradesh High Court decision in CED v. Smt. P. Leelavathamma, which the Appellate Controller relied on, did not establish that marriage expenses of an unmarried daughter were not deductible. Instead, it highlighted that the maintenance expenses of the wife were not deductible.

The Tribunal concluded that the daughter's entitlement to a share in the property under the Hindu Succession Act, 1956, does not negate her right to maintenance and marriage expenses from the joint family property. The Tribunal also referenced the Calcutta High Court decision in CGT v. Basant Kumar Aditya Vikram Birla, which upheld the obligation of a HUF to bear the marriage expenses of an unmarried daughter as a legitimate charge on the family property.

Based on these legal precedents and the textual injunctions from Hindu law, the Tribunal held that the claim for marriage and maintenance expenses of the unmarried daughter is valid and should be deducted from the estate. The Tribunal directed the Assistant Controller to modify the assessment accordingly.

Conclusion:
The appeal was allowed in part. The Tribunal upheld the department's valuation of the HUF property but directed the deduction of marriage and maintenance expenses of the unmarried daughter from the estate, modifying the assessment as per the accountable person's claim.