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TMI Blog1985 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... r HUF) and further that the value of the shares owned by the deceased had not been correctly shown or valued in the original assessment. On the basis of the audit note itself, the Assistant Controller initiated proceedings under section 59(b) of the Act. He issued a notice to the accountable person stating that he had reason to believe that property chargeable to estate duty had escaped assessment or had been underassessed. By this notice, he also called upon the accountable person to deliver an account of all property in respect of which estate duty was payable. This notice was issued on 16-9-1975. Vide letter dated 6-12-1975, the accountable person replied to the Assistant Controller that he had not indicated in his notice under which provision of section 59, he had commenced the proceedings. The accountable person, however, filed a return. The date of the filing of the return is not clear and that it is also not necessary for our purpose. The Assistant Controller however, informed the accountable person on 14-5-1981 that deduction of Rs. 3,75,000 had been wrongly allowed in computing the value of the assets of the HUF of N.N. Mohan Sons in regard to marriage, maintenance and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts fully and truly and, therefore, even the provisions of section 59(a) were clearly applicable. On this basis alone, he held that the original assessment had been legally, correctly and validly reopened. He finally held that the withdrawal of exemption to the extent of Rs. 1 lakh originally granted to the accountable person was incorrect and required to be corrected. 4. He also agreed with the Assistant Controller that no deduction could be allowed for any provision either for the marriage of the female members or for their maintenance from the value of the estate belonging to the HUF of N.N. Mohan Sons. In this connection, he relied on the decision of Karnataka High Court in CED v. N. Ramachandra Bhat [1980] 123 ITR 841. He also maintained an addition of only Rs. 4,687 in the value of certain shares. Their value was declared at nil and was also so adopted in the original assessment. However, on the basis of the wealth-tax assessment, the value was taken at Rs. 4,687. 5. The accountable person is now in appeal before us. The first submission of the learned counsel for the accountable person before us also was that the reopening of the assessment was illegal and invalid. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like to dispose of the above contention of the learned counsel for the accountable person. We have already stated above that even, according to him, it was not necessary for the Assistant Controller to record his reasons for initiating the proceedings under section 59. That being the position, it cannot be said that there was any lacuna in the notice dated 16-9-1975 referred to above. We have also looked into the audit report. It was prepared on 15-9-1975. The circumstances go to show that it was this report which came into the possession of the Assistant Controller. He, therefore, initiated proceedings under section 59 on 16-9-1975 itself. Merely because it was converted into a formal report on 24-10-1975 is no ground to hold that it could not be made the basis of initiating the assessment proceedings against the accountable person. 9. It was conceded before us by the learned departmental representative that the action had been taken under section 59(b). We, therefore, have to examine this section and see whether the action taken by the Assistant Controller was in accordance with law. Section 59(b) states that if the Controller has, in consequence of any information in his posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted out the omissions and commissions of the WTO. It was held that the audit report should be taken to constitute sufficient information within the meaning of section 17(1)(b) of the Wealth-tax Act, 1957 corresponding to section 59(b) of the Estate Duty Act. In the present case, the audit merely informed the Assistant Controller that the house at 23, Gokhale Marg, Lucknow was in the process of construction and only a small tenement costing about Rs. 12,000 had been constructed which was unfit for human residence and, therefore, it was wrong to say that the deceased exclusively used it for his residence. On the basis of this information, section 33(1)(n) was not attracted and the exemption could not be allowed or if it had already been allowed it was clearly a mistake resulting in underassessment. Vide separate discussion, we have also upheld the view of the lower authorities that the above house was certainly not in a position to be exclusively used for the residence of the deceased. That being the position, the reopening of the assessment under section 59(b) on this score alone is in order. 10. We now briefly deal with the withdrawal of exemption under section 33(1)(n) itself. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pying a small incomplete tenement also. We, therefore, hold as a fact that the house was not in the occupation of the deceased and obviously, therefore, the exemption of Rs. 1 lakh claimed and allowed was incorrect. The orders of the lower authorities withdrawing such exemption have, therefore, to be upheld and we do so. 12. We now deal with another and more important aspect of the matter. The deceased was a member of the HUF of N.N. Mohan Sons. In the original return while computing the value of the estate belonging to this HUF, the accountable person had claimed deduction of Rs. 3,75,000 on account of provision for the marriage, maintenance and education of female members of the family as no such deduction was permissible under section 33(k) read with section 39(3) of the Act. This view was adopted by the Assistant Controller. He excluded the sum of Rs. 3,75,000 from the value of the estate and accordingly enhanced the value of the deceased's share proportionately. The enhancement was upheld by the Appellate Controller. 13. This matter is also in appeal by the accountable person before us. We have heard the parties. We are of the opinion that the withdrawal of the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said paragraph is quoted below: "Property available for partition.---(1) In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughters. Where a partition takes place between the sons, provision must also be made for the funeral ceremonies of the widow and mother of the last male holder. After this is done, an account must be taken of the joint family property in the hands of the manager and other members of the family, according to the rule laid down in the next following section." 14. At best it could be said that there is divergence of views on the issue. In such a situation, the view favourable to the assessee must prevail. The Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 had held that if the Court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the Court has to adopt that interpretation which favours the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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