1969 (12) TMI 15 - HC - Income Tax

Estate Duty Act, 1953 - scope of section 7(1) - Whether one-fourth share of the deceased in the joint family properties, to which she was entitled under section 3 of the Hindu Women s Rights to Property Act, 1937, was correctly included in her estate as property deemed to pass on her death under section 7 - Held, no

Summary

Issues Involved:

1. Inclusion of the deceased widow's one-fourth share in joint family properties under section 7 of the Estate Duty Act, 1953.
2. Ultra vires nature of the Estate Duty Act, 1953, concerning agricultural lands.
3. Inclusion of accrued interest on fixed deposits and Government securities up to the date of the deceased's death under section 34(2) of the Estate Duty Act, 1953.

Issue-wise Detailed Analysis:

1. Inclusion of the deceased widow's one-fourth share in joint family properties under section 7 of the Estate Duty Act, 1953:

The court examined whether the one-fourth share of the deceased widow in the joint family properties, to which she was entitled under section 3 of the Hindu Women's Rights to Property Act, 1937, was correctly included in her estate as property deemed to pass on her death under section 7 of the Estate Duty Act, 1953. The court opined that the widow's interest under section 3(2) of the Hindu Women's Rights to Property Act, 1937, was not the same in character and incidents as her husband's interest in the joint family property. The widow's interest was a limited interest known as a Hindu woman's estate, which would lapse or merge into the coparcenary upon her death unless she had claimed partition. The court held that the widow's interest did not pass within the meaning of section 5 of the Estate Duty Act, and no benefit of value accrued to the surviving coparceners upon her death. The court relied on the precedent set by Attorney-General of Ceylon v. Arunachalam Chettiar, which held that for section 8(1) to be applicable, there must be a cesser of interest in property and a benefit arising by such cesser, which must be capable of valuation by reference to the income of the property. The court concluded that the widow's interest was not a coparcenary interest and did not pass to the surviving coparceners upon her death. Therefore, the inclusion of the widow's one-fourth share in the joint family properties under section 7 of the Estate Duty Act was not warranted.

2. Ultra vires nature of the Estate Duty Act, 1953, concerning agricultural lands:

This issue was not pressed by the accountable persons, and thus, the court did not address it in detail.

3. Inclusion of accrued interest on fixed deposits and Government securities up to the date of the deceased's death under section 34(2) of the Estate Duty Act, 1953:

This issue was also not pressed by the accountable persons, and thus, the court did not address it in detail.

Conclusion:

The court answered the first question in favor of the accountable persons, holding that the one-fourth share of the deceased widow in the joint family properties was not correctly included in her estate as property deemed to pass on her death under section 7 of the Estate Duty Act, 1953. The court awarded costs to the accountable persons, with counsel's fee of Rs. 250.