CONTROLLER OF ESTATE DUTY Vs. JAISINGH

JUDGEMENT

(1.) THIS reference has been made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, under Section 64(4) of the Estate Duty Act, 1953 (hereinafter referred to as "the Act"), referring the following question of law arising out of its order dated November 6, 1971, to this court for its opinion:

(2.) THE brief facts of the case which have led to the making of the reference are as under :

(3.) A bare reading of the relevant portion of the order passed by the Tribunal dated November 6, 1971, which has been quoted above in extenso, goes to show that it was argued before the Tribunal on behalf of the accountable person that the fact that the amount in question was shown in the deceased's account books as belonging to his wife for such a long period of over 15 years abundantly established that the money belonged to her. However, the Tribunal does not appear to have accepted the aforesaid contention advanced on behalf of the accountable person and the Tribunal merely observed that the fact that the said amount was shown in the deceased Kishansingh's account books in the name of his wife for such a long period of more than 15 years left no doubt that the deceased had desired that the amount in question should be considered as belonging to his wife. It is one thing to say that the deceased wanted the amount in question to be treated as belonging to his wife and quite another thing to say that the Tribunal held as a fact that the amount in question belonged to the wife of the deceased, Kishansingh. There were two impediments in the way of the Tribunal in giving a finding of fact to the effect that the said amount belonged to the wife of the deceased, Kishansingh. The first reason was that in the income-tax assessments of Kishansingh, right from the beginning of the year 1950-51, the interest on the said deposit standing in the name of the wife of Kishansingh was disallowed by the Income-tax Officer and was added to the total income of the deceased, Kishansingh. This situation continued from 1950-51 right up to the death of Kishansingh. Moreover, those assessments were accepted without any objection as no appeals were preferred by Kishansingh in respect of the assessments on that question. The second formidable objection in this respect was that the Assistant Controller of Estate Duty and the Zonal Controller of Estate Duty held that no material was placed before them to show that the amount in dispute in fact belonged to the wife of Kishansingh, deceased. If no material was placed on the record to show that the amount did not belong to Kishansingh or that it belonged to his wife, it could not be held as a fact that the said amount belonged to the wife of Kishansingh, deceased, merely because for a long period of over 15 years, Kishansingh chose to show the said amount in his account books as belonging to his wife. The Tribunal, being aware of this position, did not accept the contention advanced before it by the accountable person and did not record a finding of fact that the amount in dispute in fact belonged to the wife of Kishansingh, deceased. It was because of this reason that an alternative argument was advanced on behalf of the accountable person before the Tribunal that the amount may be treated as a gift made by the deceased, Kishan-singh, to his wife before the assessment year 1950-51. This argument found favour with the Tribunal and appears to have been accepted by the Tribunal in its order dated November 6, 1971, and that is why the Tribunal observed that entries in the account books of the deceased could be considered as evidence of gift, particularly in view of the fact that such entries had not come into existence in the year of death of Kishansingh or shortly before his death, but the same had existed for a long time. However, the Tribunal while arriving at the finding that the amount in dispute may be considered to have been gifted by Kishansingh to his wife, failed to consider the provisions of Section 10 of the Estate Duty Act, which are as under :