1969 (11) TMI 11 - HC - Income Tax

Estate Duty Act, 1953 - Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the value of the jewellery that passed on the death of the deceased was Rs. 1,00,000 - Held, yes

Summary

Issues Involved:
1. Whether the Tribunal was justified in holding that the value of the jewellery that passed on the death of the deceased was Rs. 1,00,000.

Detailed Analysis:

1. Tribunal's Reliance on Wealth-Tax Proceedings:
The accountable person argued that the Tribunal erred in mechanically relying on the wealth-tax proceedings. The deceased had disclosed jewels worth Rs. 1,00,000 in his wealth-tax returns for the assessment years 1955-56 and 1956-57, but later retracted this value to Rs. 40,000 in 1957-58, claiming part of the jewels were given away. The Tribunal found no satisfactory proof of disposal of the jewels and determined the value as Rs. 1,00,000, which became final on appeal.

2. Argument of Depletion and Use of Jewels:
The accountable person contended that the deceased might have utilized or sold the jewels in India or the United Kingdom, supported by large bank credits found in the UK. However, the Tribunal found no evidence to substantiate this claim. The accountable person's affidavit stating only Rs. 3,350 worth of jewellery was inventoried was not sufficient to shift the burden of proof to the revenue.

3. Burden of Proof:
The court emphasized that the initial burden of establishing the correctness of the return filed by the accountable person lies with them. The revenue can depart from this if they provide evidence to the contrary. The court found that the accountable person did not provide convincing evidence to prove the depletion of the jewels.

4. Legal Framework and Definitions:
Section 2(15) of the Estate Duty Act defines "property" broadly, and Section 5 charges estate duty on all property passing on death. Section 6 deems property the deceased was competent to dispose of as passing on death. The court noted that the relevant provisions make all such property, including movable property like jewellery, exigible to duty.

5. Tribunal's Consideration of Evidence:
The Tribunal considered all relevant facts and circumstances, including the deceased's wealth-tax returns and the lack of evidence for the claimed depletion of jewels. The court found that the Tribunal did not base its findings on suspicions or conjectures but on substantial material evidence.

6. Legal Precedents and Analogies:
The court referenced Parimisetti Seetharamamma v. Commissioner of Income-tax and Omar Salay Mohamed Sail v. Commissioner of Income-tax, emphasizing that findings of fact by the Tribunal should not be interfered with unless they are perverse or unreasonable. The court found the Tribunal's findings to be reasonable and backed by relevant material.

7. Final Determination:
The court concluded that the finding of the Tribunal that Rs. 1,00,000 worth of jewellery passed on the death of Ramaswami Naidu was not unreasonable or perverse. The Tribunal exercised due care and judgment in its decision.

Conclusion:
The question was answered against the accountable person, affirming the Tribunal's determination that the value of the jewellery passing on the death of the deceased was Rs. 1,00,000. The accountable person was ordered to pay costs, with counsel's fee set at Rs. 250.