1983 (4) TMI 112 - AT - Income Tax

Summary

Issues:
- Estate duty assessment of the estate of late Bhavarilal Bhandari
- Inclusion of gifted amounts in the estate under sections 9, 10, and 46 of the Estate Duty Act, 1953
- Disallowance of deduction of amounts owing to donees as debts under section 46(1) of the Act
- Contention regarding simultaneous addition under sections 9, 10, and disallowance under section 46(1)

Analysis:
The appeal before the Appellate Tribunal ITAT MADRAS-A pertained to the estate duty assessment of the estate of late Bhavarilal Bhandari, specifically focusing on the inclusion of gifted amounts in the estate under sections 9, 10, and 46 of the Estate Duty Act, 1953. The deceased had made gifts to his son and daughter-in-law in previous years, which were deposited in his business. The Assistant Controller included these amounts in the estate under section 10 but disallowed the deduction of these amounts as debts under section 46(1). The Appellate Controller accepted the assessee's contention and deleted the addition of the gifted amounts. The department appealed, arguing for simultaneous addition under sections 9, 10, and disallowance under section 46(1).

The Tribunal found no merit in the department's appeal, emphasizing the purpose of deeming provisions like sections 9, 10, and 46 to prevent evasion or avoidance of estate duty. These provisions aim to nullify the effect of transactions that could lead to such evasion. For instance, under section 9, gifts made close to the deceased's death are deemed to pass on death, regardless of actual ownership. Similarly, section 10 deals with the deemed passing of gifted property if the donee does not assume possession and enjoyment to the exclusion of the donor. Section 46(1) allows for disallowance of debts owed by donees. The Tribunal clarified that once a property is included under any of these provisions, there is no further inclusion required under another provision. The deeming provisions may be applied alternatively or conjunctively, but the property cannot be repeatedly included under different provisions once it has been accounted for. Therefore, the Tribunal rejected the department's objection and dismissed the appeal.