TMI Blog1977 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... lying the principle in section 36 of the Estate Duty Act, 1953, is Rs. 2 lakhs. The correctness of this finding has not been canvassed and does not form the subject-matter of any reference to us. Out of Rs. 2 lakhs worth of joint family properties, a bulk of it was contributed by a residential house in which the deceased lived with his son and wife and the condition necessary for getting exemption under section 33(1)(n) of the Estate Duty Act that it should have been exclusively used by the deceased for his residence was assumed during the proceedings. The value of the house has exceeded Rs. 1 lakh, and the house being situated in the city of Madras, a place having a population of much more than ten thousand, the exemption which is claimable by the accountable person must be limited to Rs. 1 lakh. This aspect has also not been disputed. On these facts, the question that arose before the Tribunal for determination was the interpretation to be placed on section 33(1)(n) read with sections 34 and 39 of the Estate Duty Act. We are constrained to remark that in dealing with this question, the import of the sections has not been properly appreciated or even understood, with the result th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the second part, after dealing with the imposition of estate duty and the extent of charge, sections 6 to 20A deal with property which is deemed to pass. Section 7 thereof is important for our purpose. That section provides that the property in which the deceased or any other person had an interest ceasing on the death of the deceased shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cesser of such interest, including, in particular, a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law. Section 33(1) provides that to the extent specified against each of the clauses in this sub-section, no estate duty shall be payable in respect of property of any of the kinds mentioned therein belonging to the deceased which passes on his death. One of the various kinds of property dealt with under that sub-section is a house or part thereof exclusively used by the deceased for his residence, to the extent the principal value thereof does not exceed rupees one lakh if such house is situate in a place with a population exceeding ten thousand, and the full prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the death of a member thereof shall be the principal value of the share in the property of the tarwad or tavazhi or, as the case may be, the kntumba or kavaru which would have been allotted to the deceased had a partition taken place immediately before his death. (3) For the purpose of estimating the principal value of the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law in order to arrive at the share which would have been allotted to the deceased had a partition taken place immediately before his death, the provisions of this Act, so far as may be, shall apply as they would have applied if the whole of the joint family property had belonged to the deceased. From section 39(1) it is clear that the value of the benefit accruing or arising from the cesser of a coparcenary interest-these words reflect the terms of section 7--in any joint family property governed by the Mitakshara school of Hindu law which ceases on the death of a member thereof shall be the principal value of the share in the joint family property which would have been allotted to the deceased had there been a partition immediately before his death. Sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty that passed on the death of an individual. This section has to be applied in the case of individuals in their exclusive right as well as in the case of members of a joint Hindu family who by virtue of the fictions introduced by sections 7 and 39(1) are taken to have passed on properties on their death for the purpose of the Estate Duty Act. Naturally, it follows that in determining the total value of the properties of the Hindu family, these properties that are left out of account by the clear provisions under section 33(1) must also be left out for the purpose of determining the total value of the properties of the joint family. To make it clear, we would like to state that there is no charge at all on the exempted properties. It is as though that these properties are not taken into account at all for the purpose of the Act. In the light of the above, for the purpose of determining the value of the share of a member of the joint Hindu family and for the purpose of imposing estate duty on his estate after his death, first of all, the total value of all the properties, valuing each of them separately, must be determined under section 39(3). After having determined that, such o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was Rs. 85,000 --which passed, is it possible under the section to grant exemption from duty to the extent of Rs. 1 lakh is the question arising for determination. Obviously, the answer is in the negative for the section very clearly refers to the property which passes. The property which passed can only be the half share in the house and the exemption being only in respect of that property, nothing more than the value of the property can even be exempt. The limitation of Rs. 1 lakh provided by the section imposes a restriction and that too will have to be applied if the interest that passes can be valued at over 1 lakh of rupees. But the exemption under this section on no account can exceed the value of the property which passed. If the value of the property exceeds Rs. 1 lakh, the exemption will be limited to Rs. 1 lakh. If the value of the property that passed is less than Rs. 1 lakh, the exemption would have to be limited to the value of the property. It is, therefore, clear on the facts of the case that the extent of the exemption is only Rs. 85,000. We have sufficiently made clear the various provisions and indicated the method that should be adopted in determining the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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