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Issues:
1. Validity of an agreement regarding agricultural lands and its impact on estate duty assessment. 2. Interpretation of Section 24 of the Estate Duty Act. 3. Application of Hindu Women's Right to Property Act and Hindu Succession Act in determining estate duty liability. 4. Inclusion of agricultural lands in estate duty assessment. Issue 1: Validity of the agreement and its impact on estate duty assessment The case involved an agreement between a deceased individual and another party regarding agricultural lands, which was unregistered. The deceased was given lands to be enjoyed during her lifetime without powers of alienation. Upon her death, the value of these lands was not included in the estate duty assessment. The Asst. Controller and the Appellate Controller held that the lands should be included in the assessment under Section 7 of the Estate Duty Act as the agreement did not comply with Section 24. The Tribunal also rejected the argument that the agreement was a valid family arrangement, stating that the lands continued to belong to the Hindu Undivided Family (HUF) of which the other party had become the Karta. Issue 2: Interpretation of Section 24 of the Estate Duty Act The Tribunal determined that even if the deceased had a life interest in the lands under the agreement, Section 24 applied. It was noted that since the lands belonged only to the HUF and the deceased had no interest in them, the remainder vested in the family. The Tribunal concluded that the proviso to Section 24(1) did not apply in this case. Issue 3: Application of Hindu Women's Right to Property Act and Hindu Succession Act The High Court held that the agreement between the deceased and the other party was void, and no interest accrued to the deceased under it. The deceased was deemed entitled to a half share in the agricultural properties of the HUF under the Hindu Women's Right to Property Act. Upon the coming into force of the Hindu Succession Act, she became entitled absolutely to such half share. However, the deceased did not have a similar entitlement to the agricultural lands due to the timing of her husband's death and the relevant legislation. Issue 4: Inclusion of agricultural lands in estate duty assessment The High Court clarified that the value of the agricultural land was not includible in the assessment. Only the value of the deceased's half share in the non-agricultural properties of the HUF at the time of her death should be considered. The court emphasized that without a charge created for maintenance on the agricultural lands, the deceased did not have an interest in those lands, and Section 7 of the Estate Duty Act did not apply to them. The court allowed the appeal in part, directing the Asst. Controller to ascertain the value of the deceased's half share in the non-agricultural properties for inclusion in the assessment.
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