GUNVANTIBAI Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) APPELLATE Tribunal, Indore Bench, Indore, has stated the case and referred the following questions for the opinion of this court under Section 64 of the E.D. Act:

(2.) THE material facts giving rise to these questions are as follows. Shri Ratilal Manekji expired on June 23, 1970. He was the karta of the HUF consisting of himself, his wife and two children. On his death his widow, Smt. Gunvantibai, submitted an account of the estate of the deceased and declared the principal value of the estate at Rs. 2,01,309. THE Assistant Controller, after granting relief under Sections 23 and 33 of the E.D. Act, determined the principal value of the property of the deceased at Rs. 2,81,545. For rate purpose he added the shares of the two lineal descendants at Rs. 3,60,246 and the total value including this amount was determined at Rs. 6,41,791. THE Assistant Controller made an addition of Rs. 8,880 as interest accrued on two gifts for a sum of Rs. 1,11,000 made by the deceased within two years of his death. According to the Assistant Controller this interest had accrued on the gifts and had formed part of the estate of the deceased. THE deceased was a partner in the firm, M/s. Ratilal Manekji. THE accountable person had shown investment of the deceased in this firm at Rs. 3,619. THE Assistant Controller revalued the closing stock and enhanced the interest of the deceased in the firm by Rs. 4,890. THE accountable person objected before the Appellate Controller and the Appellate Tribunal to the inclusion of the share of the two lineal descendants for rate purposes to the principal value of the estate of the deceased. Second ground raised by the accountable person before the appellate authorities was against the rejection of her claim for exemption of the full value of the residential house belonging to the HUF under Section 33(1)(n) of the Act. Third ground related to the inclusion of Rs. 8,880 as accrued interest on a sum of Rs. 1,11,000 gifted by the deceased within two years of his death. Lastly, the accountable person had challenged the enhancement made by the Assistant Controller in the value of the closing stock of the firm, M/s. Ratilal Manekji, while working out the investment of the deceased in the said firm. THE objections and the above claims were rejected by the Appellate Tribunal and the questions noted above have been referred for our opinion at the. instance of the accountable person.

(3.) IN fact the constitutional validity of Section 34(1)(c) of the E.D. Act, 1953, providing for aggregation of property and rates of duty could not be considered by the authorities constituted under the E.D. Act because these authorities are the creatures of the statute itself (see K. S. Venkataraman and Co. (P.) Ltd. v. State of Madras [1966] 60 ITR 112 (SC)). We, therefore, confirm the finding of the Appellate Tribunal and answer the question in favour of the revenue and against the accountable person.