MINAL A MEHTA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE Tribunal has referred the following three questions to this Court for its opinion, under S. 64 of the ED Act, 1953 :

(2.) BRIEFLY stated, the facts are that A.B. Mehta, who was an advocate, died on 13th Oct., 1973. The above three questions arose during the estate duty assessment proceedings pertaining to the estate of the deceased. The points that arise for our consideration and opinion in this reference are now covered by the decision of this Court and the decisions of the Supreme Court. This Court in Gunvantlal Keshavlal vs. CED (1982) 27 CTR (Guj) 95 : (1982) 134 ITR 533 (Guj), has held that the entire HUF property has to be taken into account for the purpose of working out the value of the interest of the lineal descendants of the deceased for the purposes of S. 34(1)(c) of the Act. This Court also held that interest of all the lineal descendants of the deceased in the joint family property or HUF property has to be aggregated so as to form one estate and estate duty has to be levied thereon at the rate or rates applicable in respect of the principal value thereof. In view of the decision of this Court, question No. 1 will have to be answered in the affirmative.

(3.) THE third question referred to us is with respect to outstanding professional fees. This point is also covered by two decisions of the Supreme Court. In CWT vs. Vysyaraju Badreenarayana Moorthy Raju (1985) 45 CTR (SC) 217 : (1985) 152 ITR 454 (SC), the Supreme Court has held that the value of a property on a legal plane refers to the value of the rights in that property. What accrues as a right also falls to be included in the assets of an assessee under the WT Act, 1957. The system of accounting, mercantile, cash or hybrid, is of no relevance for the purpose of determining the assets of the assessee. In Henry Joshua Silverston vs. CWT and Dipti Kumar Basu vs. CWT (1992) 102 CTR (SC) 136 : (1991) 192 ITR 296 (SC), the Supreme Court confirmed the decision of the Calcutta High Court in Dipti Kumar Basu vs. CWT (1976) 105 ITR 450 (Cal) wherein it was held that the outstandings due to a firm of solicitors from its clients constituted assets the value of which had to be included in the assets of the firm for the purpose of ascertaining the interest of a partner of the firm therein for computing his net wealth for the purpose of wealth tax under the Act. Though these two decisions of the Supreme Court are under the WT Act, it would not make any difference because asset is property and whatever the Supreme Court has observed with respect to asset in that case will equally apply to the property for the purposes of the Act. Therefore, the third question will have to be answered in the affirmative.