9911796707
TMI Blog1983 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... to her daughter, Neetha. The said daughter had advanced a loan to the deceased on May 28, 1971, of an identical sum. In the course of the assessment proceedings under the Act, the accountable person did not include the sum of Rs. 20,000 gifted in favour of the daughter, while at the same time claimed deduction in respect of the loan taken by the deceased from her daughter. The Asst. Controller of E.D., however, included in the assessment the sum of Rs. 20,000 gifted by the deceased in favour of her daughter, as property passing on death under s. 9 of the Act. He also disallowed the deduction of Rs. 20,000 claimed as a loan due by the deceased to her daughter. Aggrieved by the order of the Asst. Controller, an appeal was filed before the Appellate Controller, but without success. The matter was thereafter taken by the accountable person to the Income-tax Appellate Tribunal in second appeal. The Tribunal, after having held that both ss. 9 and 46 of the Act applied to the facts of the case, proceeded to delete the sum of Rs. 20,000 from the assessment on the ground that there cannot be two additions of Rs. 20,000 each, one by virtue of s. 9 of the Act and the other as a result of disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, no material was placed before the Appellate Controller to establish that assertion. In view of the fact that the accountable person has not established by adducing necessary evidence that there is no nexus between the amount gifted by the deceased to her daughter and the amount lent by the daughter to the deceased, the Appellate Controller proceeded on the basis that the lending by the daughter was of the same amount which had been gifted to her by the deceased and, therefore, s. 46 stood attracted. Even the Tribunal proceeded on the basis that the borrowal by the deceased was of the very same amount as the one gifted by the deceased to the daughter and, therefore, s. 46 applied. All the authorities having proceeded on the basis that the liability to pay the sum of Rs. 20,000 arose out of the amount gifted by the deceased to the daughter, it is not possible for us to ignore the said finding and entertain the contention on behalf of the accountable person that there is no nexus between the amount gifted by the deceased to her daughter and the amount lent by the daughter to the deceased. It is also significant to note that the questions referred to this court do not comprehen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides for aggregation for the purpose of determining the rate of estate duty to be paid on properties passing on the death of the deceased and those which are deemed to have passed on the death of the deceased. Sub-section (5) of this section says that no property shall be aggregated more than once, nor shall estate duty in respect thereof be levied more than once on the same death. Then we come to s. 44 and that section provides for allowance being given for debts incurred and incumbrances created by the, deceased, Subject to certain conditions. Section 46 provides for abatement of certain debts incurred or incumbrances created by the deceased, if they are in relation to the property derived from the deceased. It is in the light of the above provisions, we have to see whether the Tribunal has come to the right conclusion in this case. As already stated, the sum of Rs. 20,000, being the amount gifted by the deceased to her daughter, is admittedly includible as the property deemed to have passed on the death of the deceased, under s. 9 of the Act. Mr. Subramaniam attempted to argue that as result of the application of s. 9, the gift should be ignored entirely for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not see how there can be a double assessment in this case. It is no doubt true in this case that the amount gifted by the deceased to her daughter and the amount lent by the daughter to the deceased happens to be the same. Both the sums, however, are of different character, one has proceeded from the deceased, as gift and the other has proceeded from the daughter to the deceased by way of loan. Supposing in this case, the amount borrowed is different from the amount gifted then the theory of double assessment or double deduction of the same sum will not apply. We are of the view that the addition made under s. 9 and the liability under s. 46(1) are clearly independent of each other. In this case the accountable person has made up his accounts and submitted the return in such a way as to make it appear that there is double deduction or assessment, while in fact there is no question of double assessment of the same sum of Rs. 20,000. What the accountable person has done is to value the estate without including the sum of Rs. 20,000 gifted by the deceased to her daughter within two years before the death of the deceased and at the same time deducting the sum of Rs. 20,000 which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deceased has made a gift so as to attract the provisions of sections 9 and 10 and subsequently the donee advances a loan of the gifted amount to the deceased, provisions of sections 9/10 and section 46 can be invoked simultaneously. It is clarified that the provisions of sections 9/10 and section 46 can be invoked simultaneously provided the conditions mentioned in the said section are otherwise applicable." (F. No. 309/2/77/ED. dated 23-5-77 of the Central Board of Direct Taxes). The aforesaid instruction is a clear deviation from the practice said to have been followed in the United Kingdom in administering death duty. The said instruction proceeds on the basis that ss. 9 and 46 can be invoked simultaneously provided the conditions mentioned in the said sections are otherwise applicable. Even otherwise we are of the view that it is not possible for the court to ignore the specific provisions of ss. 9 and 46 or water down the same, taking into account the hardship that may be caused in a particular case. The Tribunal has also proceeded on the basis that the double assessment of the same amount is prohibited by s. 34(5) of the Act. We do not see how s. 34(5) will come in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
