ASHA RANI Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The ticklish question of law reproduced below, which has been referred to us at the instance of the assessee by the Tribunal, Amritsar Bench, Amritsar under s. 64(1) of the ED Act, 1953 (hereinafter referred to as the Act), has evoked divergent and diametrically different views from different High Courts of the country :

(2.) One Telu Ram, the sole surviving co-parcener, who constituted a Hindu Undivided Family (hereinafter referred to as HUF) with his wife, died on 27th January, 1977. Wife, being the accountable person, after issuance of statutory notice, filed the estate duty return contending that the properties, both movable and immovable, were ancestral and the deceased who was governed by Mitakshara school of Hindu law constituted an HUF with his wife. It was claimed that half portion of the properties belonged to her and, therefore, only half of the HUF properties should be included in the estate passing on the death of the deceased. The Asstt. CED found that the deceased was the sole surviving co-parcener at the time of his death. He was competent to dispose of whole of the properties. Wife was entitled to claim maintenance only and could not claim partition of the HUF properties. The Asstt. CED held that whole of the properties passed on the death of the deceased and, therefore, included the entire estate of the deceased for levy of the estate duty.

(3.) Mr. A. K. Mittal, learned counsel appearing for the accountable person, relying upon the decisions of the Bombay and Orissa High Courts in CED vs . P. G. Chaware, [1993]204ITR513(Bom) and Dulari Devi & Ors. vs . CED, [1995]211ITR524(Orissa), respectively, vehemently contended that there can be a Hindu joint family consisting of the sole co-parcener with his wife. In the event of the death of either one of them, for computing the interest of the deceased in the HUF properties, s. 39 of the Act would apply and only that portion of the properties which would fall to the share of the deceased on a notional partition under s. 6 of the Act of 1956 immediately before the death of the deceased, would be the interest which would pass on the death of the deceased. Under s. 39(1) of the Act, there has to be a deemed partition for determining the share of the deceased in the HUF property.