J.C. Shah J. - (1.) Arunachallam Chettiar--whom will hereinafter be called "A Senior" had three wives--Valami Achi. Lakshmi Achi and Nachiar Achi. By Valami Achi he had a son who was also called Arunachallam--we will call him "A. Junior". A Junior married Umayal Achi. A Senior, A. Junior and the wives of the two members formed a joint Hindu family, possessing a large estate in Ceylon. A. Junior died on July 9, 1934. A Senior died on February 23, 1938, leaving heirs running his two wives Lakshmi Achi and Nachiar Achi and his sons widow Umayal Achi. The Revenue authorities in Ceylon levied Rs. 221,743 as estate duty in respect of the estate of A. Junior and Rs. 6.33,601,76 in respect of the estate of A. Senior. The levy was challenged by the three widows and the dispute was carried to the Judicial Committee of the Privy Council. The Board set aside the entire levy. In 1957 the Government of Ceylon deposited in Court the duty which was levied together with Rs. 7,97,072 as interest due from the date on which the estate duty was collected.
(2.) After the death of A. Senior, there were disputes between the three widows Lakshmi Achi, Nachiar Achi and Umayal Achi, and each widow adopted a son to her deceased husband. A suit for partition of the joint family property was then filed in the Civil Court at Deokotai. Under a settlement reached on February 17, 1949 between the three widows and the adopted son of A. Junior (whom we will hereinafter call the assessee) was held entitled to 5/24th share in the estate.
(3.) This appeal relates to the liability to income-tax on the share of the assessee in the amount of interest paid on the estate duty which was refunded by the Ceylon Government after the Judicial Committee set aside the order levying the estate duty.;