1969 (2) TMI 36 - HC - Income Tax

Summary

Issues:
Interpretation of Estate Duty Act, 1953 - Inclusion of movable property in estate valuation
Classification of compensation received for land notified under laws of Burma
Applicability of legal precedents in determining the nature of compensation received for land

Analysis:
The case involved a reference under section 64(1) of the Estate Duty Act, 1953, regarding the valuation of an estate bequeathed in a will. The main issues revolved around the inclusion of movable property and compensation received for land notified under the laws of Burma in the estate valuation. The accountable persons disputed the valuation done by the Assistant Controller, particularly concerning Rs. 77,227 in outstandings due to the deceased in Burma and compensation for notified agricultural land.

Regarding the outstandings, the court held that they were dutiable under the Estate Duty Act as movable property, despite arguments about their marketability and recoverability. The court emphasized that the outstandings were not exempt from valuation merely due to restrictions on repatriation, as per Section 21(1) of the Act. The lack of evidence regarding unrecoverability led to the dismissal of the accountable persons' claims.

On the issue of compensation for the notified agricultural land, the court rejected the argument that such compensation should be treated as immovable property outside the scope of Indian estate duty. Legal precedents, including Ranga Rao Bahadur v. State of Madras and Fletcher v. Ashburner, were cited to support the view that compensation for land retains its movable property nature unless subject to specific rights or liabilities. The court clarified that only the compensation the deceased was entitled to receive for the notified land during his lifetime should be included in the estate valuation.

The judgment highlighted the definition of property under the Estate Duty Act and the treatment of interests in land under the Act's rules. It emphasized that unless the deceased had a direct interest in the land, such as possession, interests like those of a mortgagee were considered movable property. The court ruled against the accountable persons, affirming the inclusion of the compensation and outstandings in the estate valuation, with costs awarded to the revenue.