1987 (2) TMI 143 - AT - Income Tax

Summary

Issues Involved:
1. Validity of section 59 proceedings under the Estate Duty Act, 1953.
2. Alleged estate escaping assessment from estate duty.
3. Reassessment of the principal value of the estate.
4. Inclusion of goodwill in the estate valuation.
5. Revaluation of immovable properties and shares.
6. Withdrawal of exemption under section 33(1)(p) of the Act.

Detailed Analysis:

1. Validity of Section 59 Proceedings:
The primary issue in the appeal was the validity of section 59 proceedings. The accountable person argued that the notice under section 59 was bad in law and that there was no failure on their part to disclose all material facts necessary for assessment. The Assistant Controller's reassessment was challenged on the grounds that it amounted to a change of opinion on the same facts, which is not permissible under section 59.

2. Alleged Estate Escaping Assessment from Estate Duty:
The accountable person contended that there was no estate escaping assessment. The original assessment had already scrutinized the principal value of the estate, and the reassessment was based on the same facts. The reassessment attempted to include items such as goodwill and revaluation of properties and shares, which were already considered in the original assessment.

3. Reassessment of the Principal Value of the Estate:
The Assistant Controller initially determined the principal value of the estate at Rs. 12,59,720, which was later reassessed to Rs. 6,37,716. The reassessment included the value of goodwill in the firm of Byculla Trading Co., which was initially excluded. The accountable person argued that the reassessment was a mere change of opinion and not based on new information.

4. Inclusion of Goodwill in the Estate Valuation:
The accountable person argued that the goodwill of Byculla Trading Co. was already adjudicated in the original assessment, where it was determined that there was no goodwill to be included. The Assistant Controller's attempt to include goodwill in the reassessment was challenged as being without proper foundation and based on mere suspicion.

5. Revaluation of Immovable Properties and Shares:
The reassessment included revaluation of immovable properties and shares, which the accountable person argued was not based on any new information. The original assessment had already considered expert opinions and valuation reports. The reassessment was seen as an attempt to review the original assessment without any new material facts.

6. Withdrawal of Exemption under Section 33(1)(p):
The reassessment also included the withdrawal of exemption granted under section 33(1)(p) of the Act. The accountable person argued that the exemption was rightly granted in the original assessment and that there was no new information to justify its withdrawal.

Conclusion:
The appeal was allowed, and the reassessment under section 59 was found to be without proper foundation. The Tribunal held that the conditions of section 59(a) or 59(b) were not fulfilled, and the reassessment was based on a mere change of opinion on the same facts, which is not permissible. The original assessment was upheld, and the reassessment was set aside.