CONTROLLER OF ESTATE DUTY Vs. RAMESHWAR LAL KHETAWAT

JUDGEMENT

(1.) THE Tribunal has referred the two questions of law arising out of its order dt. 23rd Dec., 1982, under S. 64(1) of the ED Act, 1953 :

(2.) THE facts, as stated by the Tribunal, are that the deceased was a member of a smaller HUF consisting of himself and his son. The bigger HUF of three brothers had a house property in which the deceased had a one -third share. This was a self -occupied house by the deceased. The value of this property was determined by the Asst. CED at a figure of Rs. 90,000 and accordingly, the one - third share of the deceased worked out to Rs. 30,000. Out of this one -third share, the Asst. CED held that the property being a joint HUF property of the smaller Hindu undivided family consisting of the deceased and his son, the share of the deceased would come to Rs. 15,000. The exemption was granted to this extent under S. 33(1)(n). For the purpose of rate of duty, the entire value of this one -third share was taken into consideration under S. 34(1)(c) as the remaining Rs. 15,000 was the share of the lineal descendants, i.e., the son of the deceased. The Appellate Controller allowed the appeal following the decision of the Allahabad High Court in Badri Vishal Tandon vs. CED (1982) 30 CTR (All) 316 : (1982) 136 ITR 427 (All). The order of the Appellate Controller was upheld by the Tribunal. The Tribunal found that there are conflicting views on this issue. The argument of the standing counsel on this point were heard. The matter stands concluded by the decision of this Court in the case of CED vs. Smt. Nirmala Saxena (1995) 125 CTR (Raj) (1995) 214 ITR 566 (D. B. ED Ref. No. 112 of 1983) decided on 4th Jan., 1995, in which it was held by this Court that the value of the share of the lineal descendants of the deceased in the coparcenary property has to be aggregated with the principal value of the estate of the deceased for the purposes of rate of duty under S. 34(1)(c) of the ED Act, 1953. Under S. 33(1)(n), only the share of the deceased in the residential house belonging to the HUF is exempt from estate duty, because a notional partition of the HUF property immediately before death is assumed and the value of that share is determined. Exemption under S. 33 is permissible only to such share because that share alone passes on death.

(3.) IN view of the above decision of this Court, we are of the view that the Tribunal was not justified in holding that the share of the lineal descendants in the residential house property was not includible in the principal estate of the assessee for rate purposes under S. 34(1)(c) of the ED Act, 1953.