SNEHLATA R PARIKH Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) AS the Tribunal has made only one reference even though there were five separate reference applications, we have directed the office to give five separate numbers to these references by treating reference arising out of reference application No. 536 of 1980 in respect of asst. year 1969 - 70 as reference No. 3 of 1981 and references arising out of reference applications Nos. 537 to 540 of 1980 in respect of asst. yrs. 1970 -71 to 1973 -74 as WT Ref Nos. 3A, 3B, 3C and 3D of 1981 respectively.

(2.) AS the point which arises for consideration in these references is identical, all these references are heard together and disposed of by this common judgment.

(3.) SMT . Ansuyaben expired on 3rd June, 1968 leaving behind her a will dt. 23rd Feb., 1968. Under the will, she bequeathed all her properties to her children, viz., Snehlata R. Parikh, the assessee in these cases and her brother Jitendra Ramniklal. They were also made executors of the will. According to the will, the two executors had to incur expenditure for obtaining probate or succession certificate after the demise of Ansuyaben, had to perform the after -death -ceremony according to the status of the family of the deceased and had to discharge liabilities arising under the IT Act, WT Act and ED Act. All these liabilities were to be discharged from the estate of the deceased. From the residue, Jitendra was to be given shares of the companies where he was a director and the balance was to be distributed equally between Jitendra and the assessee. The executors incurred expenditure as required and also made payments in 1969, totalling to Rs. 1,54,000 towards the estate duty liability. In 1975, a further sum of Rs. 1,35,000 was paid as estate duty after the first assessment order in that behalf was passed. The shares of the value of Rs. 7,07,000 were distributed on 31st March, 1975 and jewellery worth Rs. 1,95,000 was distributed on 23rd Sept., 1977. In the wealth -tax proceedings for the asst. year 1969 -70 and onwards, the WTO sought to include the half share of Ansuyaben in the wealth -tax assessment of the assessee on the ground that it had vested in the assessee. The said step was objected to by the assessee on the ground that no part of the estate of Ansuyaben could be treated as wealth of the assessee till all the liabilities of taxation were discharged and execution of the will was completed. The WTO rejected the said contention and included the half share in the estate of Ansuyaben in the assessee's taxable wealth for the said assessment years. In the appeals filed by the assessee, the AAC made a slight modification in the order passed by the WTO. He agreed with the view that the half share which the assessee got in Ansuyaben's estate was rightly included in the assessee's taxable wealth. He then held that as she was given a share only in the residue of the estate which remained after the shares were given to Jitendra, only half share in the residue of the estate of the deceased could be regarded as her taxable wealth. He, therefore, directed the WTO to recompute correct value of the assessee's interest in the estate. The assessee then approached the Tribunal. The main contention raised on behalf of the assessee before the Tribunal was that no part of the estate of Ansuyaben was includible in the taxable wealth of the assessee in any of the years in view of S. 19A of the Act. The Tribunal held that the assessee had a right in the estate as residuary legatee right from the date of death of Ansuyaben and that she was liable to be assessed in respect of every wealth in her wealth -tax assessment. The Tribunal taking this view dismissed the appeals. The assessee moved the Tribunal for referring the following three questions in respect of each assessment year, to this Court :