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TMI Blog1979 (1) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute pertains to two house properties, (1) 11, Mahatma Gandhi Road, Indore, and (2) 27, Deshwalipura, Indore. The Controller of Estate Duty, Indore, included these properties in the estate of the deceased and taxed on the one-third share of the estate in accordance with the provisions of the E. D. Act. House No. 11, M. G. Road, Indore, stands in the name of Basantkumar Tiwari, son of the deceased, and the other house No. 27, DeswaliPura, Indore, stands in the name of Savitridevi, wife of the deceased. The value of these properties was not included in the account of the estate but the accountable person had referred to these properties in the foot-note to a statement accompanying the account of the estate. It was claimed before the Asst. Controller that these two properties were owned and possessed by these two individuals with full right of disposition thereon and the deceased had no power to alienate them and, therefore, the properties did not come within the framework of s. 6 of the E.D. Act. According to the accountable person the source of investment for the purchase of these properties, as explained by the counsel, came from the funds set aside by late Dr. Sarjuprasad, fathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in ss. 5 and 7 of the Act, the answer to these questions will be in the negative. Learned counsel appearing for the accountable person on the other hand contended that although the Asst. Controller went into the question about the acquisition of these properties and examined the material placed by the accountable person, yet felt that although the funds were available from the late Dr. Sarjuprasad, the properties standing in the names of the two persons-the son and the wife of the deceased-the accountable person has not been able to correlate these funds with the acquisition of the property. And on this, and the fact that the deceased in the returns of the HUF for the purpose of income-tax had added the income of these properties as well, the Asst. Controller came to the conclusion that these properties are impressed with the character of the HUF properties. But according to learned counsel the Appellate Controller and the Tribunal did not go into this question of fact but went on an assumption that even if these properties are assumed to be of the HUF, applying the provisions of s. 6, they could not be said to be the properties on which the deceased had a right of aliena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the name of the deceased but which the deceased was competent to dispose of, whereas s. 7 will apply in cases where the deceased had some interest in the property which ceases on his death. It, therefore, cannot be doubted that before the provisions contained either in s. 6 or s. 7 are made applicable, the competent authority under this Act has to determine the facts necessary for the application of these provisions.. Admittedly, they are deeming provisions and are meant to enlarge the scope of the properties which could be taxed under this statute. The Asst. Controller went into the material placed before him and also. examined the two note books alleged to have been written in the handwriting of Dr. Sarjuprasad showing funds available in the name of the son and wife and after examining all the material placed by the accountable person as well as the department, he felt that the accountable person " has failed to correlate the investments in the purchase of the above two properties " ; and, further examining the income-tax returns, felt that as the deceased has shown the income of these properties in the income-tax returns of the HUF, these properties are impressed with the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to dispose of the property, with the aid of s. 6, the properties could not be brought within the taxable properties passing on the death of the deceased. After this judgment of the Appellate Controller, the Asst. Controller went up in appeal before the Tribunal. The judgment of the Appellate Tribunal shows that the Tribunal did notice the observations of the Asst. Controller that HUF funds were utilized for acquisition of the two properties and further that the properties retained the imprint of the HUF. But the Tribunal also, instead of going into the facts and determining the disputed question of fact about acquisition of the property, started with an assumption as it observed in para. 11 of its order : " After careful consideration we are of opinion that the Appellate Controller is correct in the conclusion. We are prepared to assume that the deceased had correctly been assessed in the status of HUF and that he had provided HUF funds for the acquisition of the two properties. From this fact alone we are unable to hold that one property was held benami by the son of the deceased and the other by the wife of the deceased both for the benefit of the deceased. It is quite po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal did not go into the question of fact about the acquisition of property. Both the appellate authorities, on the assumption that even if the property is assumed to be of the HUF, applied the provisions contained in S. 6 and took a view which ultimately has brought this reference before us. So far as S. 6 is concerned, it could not be disputed that if the deceased was not competent to dispose of the property it could not be held to be the property passing on his death. But it is also clear that in the case of a property where the deceased had an interest as in the case of a HUF, the deeming provisions of S. 7 will have to be applied and not s. 6. And in this situation, therefore, learned counsel appearing for the department seriously contended that we should answer the reference by applying the provisions contained in s. 7 of the Act. It is no doubt true that if on the findings arrived at by the Tribunal, if we were called upon to answer the questions referred to us, it was not necessary for this court to examine only the provisions of S. 6 as thought by the Tribunal, but we could refer even to S. 7, if on the facts found we felt that the questions could be answered only by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders as are necessary to dispose of the case conformably to such judgment." Under sub-s. (5) of s. 64, if this court feels that the statement of case submitted by the Tribunal is not sufficient to enable this court to determine the questions of law raised therein, it may require the Tribunal to make such modifications as it may direct. This, therefore, clearly indicates that if the statement of case sent by the Tribunal does not state the questions on facts properly determined which in our opinion is necessary to decide the reference, we can direct the Tribunal to modify the statement of case or submit a supplementary statement of case as it was observed by their Lordships of the Supreme Court in CIT v. Indian Molasses Co. P. Ltd. [1970] 78 ITR 474, when it appears, their Lordships felt that on the statement of case as it stood the questions of law could not be answered : " Two courses are now open to us: to call for a supplementary statement of the case from the Tribunal; or to decline to answer the question raised by the Tribunal and to leave the Tribunal to take appropriate steps to adjust its decision under section 66(5) in the light of the answer of this court." It appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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