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TMI Blog1995 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal estate of the assessee for rate purposes under section 34(1)(c) of the Estate Duty Act, 1953? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the proportionate share in the accretion in the value of assets of the firm are not includible in the principal value of the estate passing on the death of the deceased under section 36(1) of the Estate Duty Act, 1953?" The facts, as stated by the Tribunal, are that the deceased was a member of a smaller Hindu undivided family consisting of himself and his son. The bigger Hindu undivided family 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f rate of duty under section 34(1)(c) of the Estate Duty Act, 1953. Under section 33(1)(n), only the share of the deceased in the residential house belonging to the Hindu undivided family is exempt from estate duty, because a notional partition of the Hindu undivided family property immediately before death is assumed and the value of that share is determined. Exemption under section 33 is permissible only to such share because that share alone passes on death. In view of the above decision of this court, we are of the view that the Income-tax Appellate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet was considered to be the correct one and the addition was accordingly deleted. The order of the Appellate Controller of Estate Duty was challenged before the Income-tax Appellate Tribunal where, on the basis of clause (4) of the partnership deed dated December 22, 1970, wherein it was provided that on retirement, no partner shall be entitled to any goodwill of the firm and he shall be entitled only to his investment amount, if any, together with the share of profit or loss, the Tribunal accepted the contention of the assessee that the deceased was not entitled to any share in the accretion of the property of the firm except the credit balance in his capital account by way of initial investment and subsequent profit credited thereto. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partner in accordance with the partnership deed have also be taken into consideration. While valuing the business as a whole, the Tribunal has taken into consideration clause (4) of the partnership agreement under which a partner is entitled to the capital invested along with the share of profit and loss and he is neither entitled for any goodwill or any other appreciation. The position which is applicable at the time of retirement is also applicable on death and, therefore, in these circumstances, the Tribunal was justified in holding that the proportionate share in the accretion in the value of assets of the firm is not includible in the principal value of the estate passing on the death of the deceased under section 36(1) of the Estat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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