1983 (9) TMI 106 - AT - Income Tax

Summary

Issues:
1. Determination of taxability of ancestral assets in the hands of a deceased individual for estate duty purposes.
2. Conflict of decisions between different benches of the Tribunal regarding the taxability of ancestral assets under section 6 of the Estate Duty Act.
3. Request for the constitution of a Special Bench to resolve the conflict of decisions.
4. Interpretation of the applicability of section 6 and section 7 of the Estate Duty Act in the context of ancestral property passing on the death of the sole surviving coparcener.
5. Consideration of High Court authorities supporting the revenue's position on the taxability of ancestral assets under section 6.

Analysis:
1. The appeal involved the taxability of ancestral assets in the hands of a deceased individual for estate duty purposes. The deceased's son claimed that the assets belonged to the Hindu Undivided Family (HUF) consisting of the deceased and his wife, and thus, only one-half share should be considered for estate duty. The Assistant Controller rejected this claim, stating that the deceased had full competence to dispose of the property as the sole surviving coparcener. The Appellate Controller followed a decision of the Amritsar Bench, holding that the entire HUF assets passed on the deceased's death for estate duty purposes under section 6 of the Act.

2. There was a conflict of decisions between different benches of the Tribunal regarding the taxability of ancestral assets under section 6 of the Estate Duty Act. The appellant's counsel cited decisions from Jaipur and Allahabad Benches in their favor, while the revenue relied on the Amritsar Bench decision. The appellant requested the constitution of a Special Bench to resolve the conflicting decisions, but the Tribunal found that the authority of the Punjab High Court supported the revenue's position, eliminating the need for a Special Bench.

3. The Tribunal analyzed the interpretation of the applicability of section 6 and section 7 of the Estate Duty Act concerning ancestral property passing on the death of the sole surviving coparcener. The Tribunal noted that the Amritsar Bench considered taxability under section 6, while the Allahabad Bench focused on section 7 without considering section 6. The Tribunal agreed with the Amritsar Bench's interpretation that the deceased's competence as the sole surviving coparcener allowed for the entire HUF assets to pass on his death under section 6.

4. High Court authorities supporting the revenue's position on the taxability of ancestral assets under section 6 were considered. The Tribunal referenced the Punjab High Court decision and emphasized that the deceased's competence as the sole surviving coparcener allowed for the entire HUF assets to pass on his death. The Tribunal followed the High Court authority and rejected the appeal, holding that the entire assets of the HUF were deemed to pass on the deceased's death under section 6 of the Estate Duty Act.