EKAMBARAM T R Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The question that has been referred to us by the central board of Revenue under the Estate Duty Act, 1953, is as follows

(2.) The applicants, Ekambaram and Gopalakrishnan, contended that the deceased possessed ancestral properties in Padi Agraharam in North Arcot District in Madras State, that the deceased came to Kurnool in the year 1910 for the purpose of doing business and that he did business in partnership along with B. P. Sesha Reddy, that for the purposes of contributing towards his part of the capital of the said partnership firm, the deceased mortgaged all his ancestral property for a sum of Rs. 5,000, that the said sum was utilised partly towards meeting the debts of his brother, who had gone out in adoption, and that with the balance of about Rs. 2,757, the deceased started stone business, which he later developed. In short, their contention is that the entire property was acquired with the aid of ancestral property. They also contended that this property has been treated as joint family property during the lifetime of the deceased in his income-tax returns, where he described himself as the karta of the joint Hindu family and the income-tax department had assessed him as such, that he continued to file his returns in the same status as the karta even after the will was executed, and that after his death also, they (the applicants) continued to treat the said properties as joint family properties and filed returns, which were being accepted by the department. In support of the mortgage, they filed a Tamil deed with its English translation, in which there was a recital that for their family expenses and for contract work, the deceaseds brother had executed a pronote, that the sum received in cash on the date of mortgage amounted to Rs. 2,757-8-0 and this was also described as cash received for our family expenditure and contract works and for other sundry liabilities.

(3.) The Assistant Controller stated that it is not clear whether the contract works referred to were those of the deceased or those done by his brother who went out in adoption and that it is also not clear whether any amount at all was utilised for contract works because the family expenses and other sundry liabilities appear to overwhelm the meager amount received on mortgage, which, according to the Assistant Controller, confirmed the statement made in the will; accordingly, he did not accept the contention of the accountable persons that the property was joint family property.