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TMI Blog1980 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... f the deceased, was exempt under section 33(1)(n) read with section 39(3) and section 34(1)(c), both for ascertaining the share of the deceased and also the shares of the lineal descendants which are to be included for rate purposes only under section 34(1)(c) of the Estate Duty Act, 1953 ? " The reference relates to the assessment of estate duty on the estate passing on the death of Pannalal Gwalre, who died on 10th July, 1966. The deceased at the time of his death was a member of an HUF. The net principal value of the estate of the deceased was determined at Rs. 6,12,722 under s. 58(3) of the Act by the Asst. Controller. While making the said assessment the Asst. Controller included a sum of Rs. 33,332 representing the value of 4/6ths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) For the purpose of determining the rate of estate duty to be paid on any property passing on the death of the deceased, (a) all property so passing other than property exempted from estate duty under clauses (c), (d), (e), (i), (j), (1), (m), (mm), (n), (o) and (p) of sub-section (1) of section 33 ; ...... (c) in the case of property so passing which consists of a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshaya, Marumakkattayam or Aliyasantana law, also the interest in the joint family property of all the lineal descendants of the deceased member; shall be aggregated so as to form one estate and estate duty shall be levied thereon at the rate or rates applicable in respect of the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest in the property of a tarwad or tavazhi governed by the Marumakkattayan rule of inheritance or of a kutumba or kavaru governed by the Aliyasantana rule of inheritance which ceases on the death of a member thereof shall be the principal value of the share in the property of the tarwad or tavazhi or, as the case may be, the kutumba or kavaru which would have been allotted to the deceased had a partition taken place immediately before his death. (3) For the purpose of estimating the principal value of the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law in order to arrive at the share which would have been allotted to the deceased had a partition taken place immediately before his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h would have qualified for exemption had any one of them died. There is no room for applying the provisions dealing with exemption at the stage of aggregation of the interest in the joint family property of the lineal descendants. Section 39(1) provides for the mode of valuation of interest in coparcenary property which ceases on the death of a member. This interest is to be valued by determining the principal value of the share in the joint family property which would have been allotted to the deceased had there been a partition immediately before his death. Section 39(3) on which great reliance has been placed by the accountable person provides that for the purpose of estimating the principal value of the joint family property of a Hindu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the joint family property under s. 39(3). The principal value of the joint family property has first to be determined by ignoring s. 33. The next stage is the determination of the principal value of the share which would have been allotted to the deceased, had a partition taken place immediately before his death. After determining the principal value of the share of. the deceased in the joint family property, exemption of the value of his interest in the residential house of the family has to be allowed under s. 33(1)(n). Thereafter, the value of the interest in the joint family property of all the lineal descendants of the deceased is to be added to the principal value of the interest of the deceased minus the exemption allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hari [1978] 113 ITR 200 (Mad)]. We respectfully agree with the view taken in these cases. The learned counsel for the accountable person relied upon a decision of the Andhra Pradesh High Court in CED v. Estate of late Durga Prasad Beharilal [1979] 116 ITR 692 (,AP). This case does, to some extent, support the learned counsel but as explained by the Karnataka High Court in K. Nataraja's case [1979] 119 ITR 769 (Kar), the reasoning is not clear as to why the valuation of the interest of the lineal descendants in the residential house can be excluded. With great respect, we are unable to agree with the view taken by the Andhra Pradesh High Court. For the reasons given above, our answer to the question is in the negative, in favour of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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