CONTROLLER OF ESTATE DUTY Vs. VENKATACHALAM R M

JUDGEMENT

(1.) THIS tax reference comes to us from the Income-tax Appellate Tribunal by way of case stated under the E.D. Act, 1953.

(2.) ONE Ramaswami Chettiar (hereinafter called "the deceased") was an undivided member of a Hindu Joint family governed by the Mitakshara law. The family consisted of two coparceners, the deceased and his only son. The family was possessed of a number of properties, both movable and immovable. ONE of the items was a residential house in a small village. In that house the deceased lived and died. The deceased had no separate properties of his own. An undivided half share in the family properties was the only property he could call his own when he breathed his last.

(3.) ALTHOUGH s 34(1) enjoins that the deceased's undivided share in the coparcenary property must be clubbed along with the share of the lineal descendant, the lineal descendant's share will not be actually subjected to the impact of the estate duty, and will fall within the formula of s. 34(2) to which we have earlier adverted. Explanation (iii) to s. 34(2) lays down that for purposes of actual calculation of duty, the share of the lineal descendant included in the aggregated share must be regarded as exempted property. The position thus is that the rate pertaining to the aggregate family estate (which consists of the deceased's undivided half share plus the son's half share) must be applied to the deceased's estate.