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TMI Blog1986 (12) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(n) in respect of the gifted property which the ACED allowed in the original assessment completed under section 58(3) on 25-10-1980. Subsequently, the Revenue Audit raised an audit query pointing out a mistake in the ACED's order of assessment. According to the audit party the exemption under section 33(1)(n) allowed in the assessment was wrong as the property in question did not belong to the deceased on the date of death and its value was included in the assessment under the deeming provisions of the Estate Duty Act. The query raised by the audit party was not accepted by the ACED but the same was included by the Revenue Audit in the Local Audit Report, a copy of which was forwarded to the Controller of Estate Duty. The ACED, however, started remedial action by issue a show cause notice under section 61. The proceedings, subsequently, were dropped by the ACED on 13-3-1981. Thereafter the ACED reopened the assessment under section 59(b) and after hearing the Accountable Person re-determined the principal value of the estate by his order dated 26-11-1983 on a total sum of Rs. 10,84,435. In this assessment he took the value of the gifted property at a sum of Rs. 1,35,000 on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal assessment. Therefore, according to the learned counsel, any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on the materials already considered by him. By placing reliance on the Supreme Co-art decision in the case of Indian Eastern Newspaper Society, the learned counsel pointed out that an error discovered on a reconsideration of the same material did not confer jurisdiction on the ACED to re-open the completed assessment under section 59(b). It has further been stated that the Madras High Court decision in the case of K. Hilal was within the knowledge of the ACED at the time of making the original assessment and consequently no fresh information came to the possession of the ACED for enabling him to act in terms of section 59(b). Our attention was drawn to the audit note, a copy of which has been filed before us as also the ACED's reply to the audit objection wherein the views expressed by the Controller of the Estate Duty have been noted which by implication suggested that the ACED initiated action on being directed by the Controller. Accordingly, it has been urged that the ACED's satisfaction in re-opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount is as under : Value of house property : Rs. The value of the self-occupied property of Bunglow as shown 1,18,000 Value of other properties 1,18,756 --------------------- 2,36,756 Less Exemption allowed under section 33(1)(n) being out of value of one house as was exclusively used by the deceased for her residence total value of this house shown at Rs. 1,18,000 but exemption only allowed Rs. 1,00,000 under section 33(1)(n) of E.D. Act. 1,00,000 --------------------- Net total value of house property 1,36,756 After passing the assessment order a notice was issued to the A/P for withdrawal of exemption as Rs. 1,00,000 under section 61 of the E.D. Act. To the show cause notice the A/P filed reply on 20-3-81. After considering the facts of the cause proceedings under section 61 are dropped vide order dt. 13-3-81. As for order under section 61 is concerned the action of the ACED was correct, as there was a disputed point the mistake could not be rectified under section 61 hence the objection of Audit that proceedings under section 61 were dropped is not correct and, therefore, not acceptable. As regards the exemption of Rs. 1,00,000 on account of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late the existence of right of use and not a permissive user or user otherwise than under a right. Deduction under section 33(1)(n) not allowable. " The note as will be apparent from the extract made above incorporates the view expressed by the ACED on the audit objection as also the opinion of the Controller in the matter. Nowhere in the note the Controller directed the ACED to re-open the assessment under section 59(a) or section 59(b). The High Court decision which was relied upon by the ACED K. Hilal's case also does not figure in the Controller's comments to the audit objection. We therefore, fail to understand as to how the Appellate Controller in paragraph 5 of his order stated that the ACED was directed by the Controller to proceed under section 59. The note containing the ACED's objection to the audit query need not, in our opinion, be confused with the reasons recorded by the ACED for purposes of re-opening the assessment under section 59(b). The Appellate Controller has not stated what were the reasons recorded by the ACED and before us also a copy of the ACED's recorded reasons has not been filed. 7. The learned counsel's submission that the ACED had no jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment the value of the gifted property was taken at Rs. 1,18,000 which was the amount disclosed in the statement furnished by the Accountable Person. In the re-assessment the value of the said property was taken on the basis of the Gift-tax order at Rs. 1,35,000. The ACED therefore had reason to believe that due to under-valuation of the property in the original assessment there was an escapement of estate duty chargeable on the property gifted. In that view of the matter also the ACED's action in re-opening the assessment can be justified. The Appellate Controller was, accordingly, justified in holding that the ACED's action in re-opening the assessment, in the circumstances, was valid. On the merits of the case also we are inclined to accept the Appellate Controller's observation that "the decision in 130 ITR, 781 clearly covers the facts of the case . . . ." The property was gifted by the deceased on 19-5-1977. Both the Will and the Gift Deed have been executed on 18-5-1977. The gift-deed was, however, registered on 19-5-1977. The donee as per gift deed and the beneficiary mentioned in the Will are different persons, since the beneficiary of the Will is Smt. Narayanibai, daughte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absolute legal owner of the same after my death. She is also authorised and will be entitled to recover all the debts, loans and other recoveries outstanding at the time of my death. There will be no Rights of anybody else on the moveable and immoveable estate and property etc. that would remain after my death. She shall make payment of Estate Duty etc. out of this estate. 3. I have absolute right to enjoy the moveable and immoveable Estate and property till my death. In this way this "WILL" has been executed on 18th May 1977 written by Wallabhdas Gowardhandas Rathi. Witness Signature ( ) . . . . . . . . . . . . . . . . . L/H thumb impression of Smt. . . . . . . . . . . . . . . . . . . Bhagirathibai Ganeshdasji Rathi (Wallabhdas) The details of land that has been bequeathed for trust Mouja Tiwasa Tq. Chandur Rly Dist. Amravati : S. No. Acre-Gunthas 56/3 2-23 63/2 7-01 59/2 9-34 70/3 4-25 109/2 14-11 100 3-35 102/2 (part) 8-29 66/4 (part) 2-39 ----------------- 53-37 " ------------------ In less than 2 months from the date of the execution of the gift deed, the deceased died. The provisions of section 9 in such circumstances became attracted, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been held that the benefit of section 5(1)(iv) of the W.T. Act will be available where the property transferred to the wife is included in the wealth-tax assessment of the husband by reason of section 4(1)(a) of the W.T. Act. It is relevant to point out that sub-section (3) of section 4 of the W.T. Act as substituted by the Finance Act, 1975, with effect from 1-4-1975, specifically provides that section 5 shall apply to assets included in the net wealth of an assessee under section 4(1)(a). There is no such provision analogous of sub-section (3) of section 4 of the W.T. Act in section 9 of the Estate Duty Act. We would, accordingly, uphold the Appellate Controller's order on this point also. 8. In the departmental appeal two grounds have been raised, namely (i) that the Appellate Controller of Estate Duty erred in deleting the interest levied of Rs. 1650 under section 53 and (ii) that the Appellate Controller erred in directing the ACED to verify the claim of A.P. for allowing deduction under section 18A of the Gift-tax Act. 9. Section 53(3) of the E.D. Act states that every accountable person shall, within six months of the death of the deceased, deliver to the Controller an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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