1969 (12) TMI 22 - HC - Income Tax

Estate Duty - partition between the deceased and his son the accountable person - Asst. Controller asked the accountable person to explain the difference between the valuation of the family jewellery given in the statement of wealth and subsequent valuation in the partition deed - there was no material on which the Controller of Estate Duty and the Board of Revenue could have come to the conclusion that the deceased at the time of his death was in possession of the jewellery

Summary

Issues:
Interpretation of Estate Duty Act, 1953 - Valuation of jewellery in deceased's possession - Burden of proof on accountable person to explain discrepancy in valuation - Comparison with similar case law.

Analysis:
The judgment pertains to a reference under section 64(2) of the Estate Duty Act, 1953, regarding the valuation of jewellery owned by a deceased individual. The accountable person, the deceased's son, declared the estate's principal value at Rs. 2,65,904, while the Assistant Controller valued it at Rs. 5,64,304, including Rs. 33,000 for alleged jewellery. The accountable person had initially valued the jewellery at Rs. 2,300, but the Assistant Controller relied on a previous wealth statement where the deceased estimated the jewellery at Rs. 50,000. A partition deed showed the jewellery's value at Rs. 18,700, divided between the deceased and his son. The accountable person could not explain the valuation difference, leading to a dispute.

The central issue was whether the accountable person had a duty to explain the discrepancy in jewellery valuation. Citing the case of Smt. Shantabai Jadhav v. Controller of Estate Duty, the court held that the burden of proof rested on the department to establish the deceased's ownership of jewellery worth Rs. 33,000 at the time of death. The court agreed that the accountable person could not be compelled to explain the jewellery's whereabouts, as evidenced by the partition deed valuing the entire jewellery at Rs. 18,700, lower than the disputed amount. The court emphasized that there was insufficient evidence to conclude that the deceased possessed jewellery worth Rs. 33,000 at the time of death, ruling in favor of the assessee and against the department.

In conclusion, the court found in favor of the assessee, stating that there was no substantial evidence to support charging Rs. 33,000 for the alleged jewellery owned by the deceased. The judgment highlights the importance of the burden of proof in establishing the value of assets under the Estate Duty Act and underscores the necessity for concrete evidence to support valuation decisions. The accountable person's inability to explain the valuation difference did not shift the burden of proof, ultimately leading to a ruling in favor of the assessee and awarding costs accordingly.