1985 (7) TMI 133 - AT - Income Tax

Summary

Issues:
1. Valuation of jewellery based on date of death.
2. Aggregation of lineal descendants' share in HUF property.
3. Mechanism for ascertaining share of lineal descendants under section 34(1)(c) of the Estate Duty Act.
4. Exclusion of wives of sons' share in aggregation of lineal descendants' share.
5. Imposition of interest under rule 42 of the Estate Duty Rules.

Analysis:
1. The first issue involves the valuation of jewellery based on the date of death. The accountable person argued for valuation as per rates provided by the Jewellers Association, while the authorities used the rate as on 31-12-1979. The ITAT held that the rate as on the date of death, certified by the Jewellers Association, should be considered for valuation, directing the jewellery to be valued accordingly.

2. The second issue concerns the aggregation of lineal descendants' share in the HUF property. The accountable person contended against aggregation, citing decisions of High Courts. However, the ITAT rejected this argument based on the mechanism prescribed in section 39 of the Estate Duty Act, which provides for ascertaining the share of lineal descendants. The ITAT emphasized that section 34(1)(c) imposes a charge on the principal value, including the share of lineal descendants.

3. The next issue addresses the mechanism for determining the share of lineal descendants under section 34(1)(c) of the Act. The ITAT clarified that the mechanism prescribed in section 39 of the Act facilitates ascertaining the share of lineal descendants. The ITAT emphasized that a charge is imposed on the principal value, which includes the aggregated share of lineal descendants.

4. The fourth issue involves the exclusion of wives of sons' share in the aggregation of lineal descendants' share. The accountable person argued for the exclusion of wives' shares, while the revenue relied on legal precedents. The ITAT reconciled the conflicting views by referring to Supreme Court decisions, emphasizing that in a total partition, the shares of wives of sons must be considered. The ITAT directed the Assistant Controller to recompute the principal value accordingly.

5. The final issue pertains to the imposition of interest under rule 42 of the Estate Duty Rules. The ITAT noted that the Assistant Controller did not provide a detailed order on this matter. Therefore, the ITAT directed a reconsideration of the interest imposition while recomputing the estate's principal value. Ultimately, the appeal was treated as allowed by the ITAT.