1971 (8) TMI 40 - HC - Income Tax

Estate Duty Act 1953 - Whether on the facts and in the circumstances of the case the estate duty was rightly levied in respect of the house property at No. 12 Elgin Road Allahabad as property passing on the death of the deceased

Summary

Issues Involved:
1. Whether the estate duty was rightly levied in respect of the house property at No. 12, Elgin Road, Allahabad, as property passing on the death of the deceased.
2. Whether the deceased had any interest in the property upon the expiry of the lease in 1958.
3. Whether the interest of a tenant from month to month holding over under section 116 of the Transfer of Property Act is heritable and passed to the heirs of the deceased.

Issue-wise Detailed Analysis:

1. Whether the estate duty was rightly levied in respect of the house property at No. 12, Elgin Road, Allahabad, as property passing on the death of the deceased:
The High Court of Allahabad addressed the question of whether the estate duty was correctly imposed on the house property at 12, Elgin Road, Allahabad, on the death of the deceased. The Appellate Tribunal had previously affirmed the valuation set by the estate duty authorities and concluded that the deceased had an interest in the property that passed on his death. The court upheld this view, confirming that the estate duty was rightly levied.

2. Whether the deceased had any interest in the property upon the expiry of the lease in 1958:
The court examined whether the deceased retained any interest in the property after the lease expired in 1958. The lease, originally granted in 1858 and renewed in 1908, expired on November 29, 1958. Despite the expiry, the deceased did not vacate the premises and continued to negotiate for a fresh lease. The Collector accepted ground rent from the deceased and his heirs, indicating assent to their continued possession. The court found that the deceased became a tenant holding over under section 116 of the Transfer of Property Act, which states that if a lessee remains in possession after the lease's determination and the lessor accepts rent, the lease is renewed from month to month. Consequently, the deceased had an interest in the property as a tenant from month to month.

3. Whether the interest of a tenant from month to month holding over under section 116 of the Transfer of Property Act is heritable and passed to the heirs of the deceased:
The court considered whether the deceased's interest as a tenant from month to month passed to his heirs upon his death. It referred to established case law, including Ram Nath v. Neta, which held that the interest of a tenant from month to month under section 116 of the Transfer of Property Act is heritable. The court distinguished this from cases where tenants continued without paying rent or without the lessor's assent, which would render them tenants on sufferance or trespassers. In this case, the deceased's tenancy was heritable and transferable, and his interest passed to his heirs upon his death. Therefore, the property was deemed to have passed on his death, making it subject to estate duty.

Conclusion:
The court concluded that the deceased was a tenant from month to month holding over under section 116 of the Transfer of Property Act, and his interest in the property was heritable and passed to his heirs. Consequently, the estate duty was rightly levied on the house property at 12, Elgin Road, Allahabad. The question referred to the court was answered in the affirmative, and the Controller of Estate Duty was entitled to costs assessed at Rs. 200.