HARISH CHANDRA KR Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Allahabad, has referred the following question of law for the opinion of this court:

(2.) THE assessee, the accountable person, is the son of one Raja Lalta Prasad, who died in the year 1924, leaving behind his widow, Rani Kalawati, and five sons, one of whom is the accountable person, and his brother, Rai Bahadur Sahu Har Prasad, and his son, Sahu Jagdish Prasad. THE family was joint at the time of the death of Raja Lalta Prasad. On April 10, 1933, a partial partition took place, which was followed by a final partition on December 18, 1941. In that, Rani Kalawati relinquished all her claim to the property in consideration of a monthly payment of Rs. 125 to her during her lifetime by each of her four sons. THE sons undertook personal liability to pay the amount, and, further, under the terms of the deed, the properties held by them were expressly charged for the payment of the amount. We will refer to the relevant clause of the deed a little later. Rani Kalawati died on December 16, 1955, and Kr. Harish Chandra filed a return. In the return filed, the value of the annuity of Rs. 6,000, which the deceased was receiving, was omitted. THE Asst. CED, taking the view that the deceased had an interest in the properties to the extent of Rs. 6,000, added the like amount to the value of the estate of the deceased assessable under Sections 7 and 40 of the Act. THE order was confirmed in appeal both by the Zonal Appellate Controller and the Tribunal. Counsel for the assessee contended that Section 7 was not attracted as the deceased did not have any interest in any property, and further that no benefit accrued or arose by cessation of her interest. It was further urged that the interest of the deceased was not capable of valuation under Section 40 of the Act, and so even in case Section 7 was attracted, the addition could not be made. To begin with, it will be convenient to dispose of the contentions based on Section 40 of the Act.

(3.) IN order that Section 7(1) should be attracted, it is necessary that the deceased should have had an interest in some property, and as a result of the interest ceasing or coming to an end on account of the death, some benefit should have accrued or arisen to some other person. Before discussing the applicability of this provision, it will be useful to refer to the partition deed under which Rani Kalawati became entitled to this annuity. Paragraph 18 of the preamble recites :