TMI Blog1979 (2) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, which has given rise to this reference, came to be made on the death of one Sethuraman Pillai. He left behind him his sons, Thandavaraya Pillai, Muthusekaran Pillai, Kalyanasundaram Pillai, Shanmugam Pillai, Radhakrishna Pillai, Paramesvaran Pillai and Purushottaman Pillai. They constituted a HUF with their respective wives and children. The family owned large properties movable and immovable. On 4th May, 1955, the nanja lands and movable properties we were divided, and by a deed dated 9th March, 1963, the house properties belonging to the said HUF were divided. The deceased was allotted the properties set out in schedule A to the partition deed of 1963, and the other properties set out in schedules B to H were allotted to his sons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the value of the properties referable to the rental income of Rs. 50 was alone included. The total amount which was added in the estate duty assessment in the above manner came to Rs.87,535. Aggrieved by this assessment the accountable person appealed to the Appellate CED who confirmed the inclusion of the said sum of Rs.87,535. The accountable person appealed to the Tribunal. The Tribunal held that under the partition deed the houses had been allotted absolutely to the sons of the deceased, that the deceased had been allotted some other properties of lesser value and that he was also given the right to receive the rent from the aforesaid houses for the duration of his life. In the view of the Tribunal, the deceased did not have any life ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected by the respective allottees of the particular properties as mentioned above though they were owners thereof. After his death they were in a position to collect the rent. Thus, as a result of his death, there was a benefit which accrued to them. The deceased's right to collect the rent ceased on his death. Thus, there is a cesser of interest and also a benefit accruing or arising by reason of the cesser of that interest. The language of s. 7 appears to cover this case on its plain construction. However, the learned counsel for the accountable person put forward two submissions. The first submission was that the properties had already been allotted to the respective allottees and that what they got had already been obtained by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation with the property, and not some interest which cannot be correlated to the property. Judged by the above test, in the present case, the deceased had an interest in the property, because of the right to collect the rent from the property. This right having ceased on his death and the right to collect the rent having accrued to other allottees on his death; there was a statutory passing of property. The Tribunal in the course of its order has referred to the decision of the Supreme Court in CED v. R. Kanakasabai [1973] 89 ITR 251. In that case, one Ratnasabapathy Pillai was the owner of certain properties. He died on 5th February, 1959, leaving behind him some heirs. The question that arose in the estate duty assessment related to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rent was no longer an impediment. There was an impediment, even on the Tribunal's finding, to the collection of the rent during the lifetime of the deceased. It would thus be clear that there was a cesser of one's interest and accrual of benefit to another. The right created in the partition deed is of no consequence as far as the present problem is concerned. We are concerned with the existence of the right, and not its origin. In these circumstances, the Tribunal was not right in coming to the conclusion that the provisions of s. 7 did not apply. In Manian Natesan v. CED [1965] 56 ITR (ED) 5, this court considered the question as to whether a liability to estate duty arose consequent on the death of an individual, who had the right of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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