K.C. Agrawal, J. - (1.) AT the instance of the Revenue, the following question has been referred to the High Court for its opinion : "Whether, on the facts and in the circumstances of the case, only 27/60 share of the lineal descendants was includible in the principal value of the estate left by the deceased or 3/5ths of share as was included by the Assistant Controller of Estate Duty ? "
(2.) IN order to appreciate the background in which the aforesaid question had been raised, we may give the family pedigree and interest in the joint family property of the lineal descendants of the deceased, Bhakt Sajjan Krishna, who died on August 3, 1979, as follows: Pedigree Table given below: JUDGEMENT_561_ITR173_1988Html1.htm The case of the accountable person was that for determining the shares of the lineal descendants, a deemed partition under Section 39(1) of the Estate Duty Act, 1953 ("the Act"), had to be contemplated not only amongst the deceased, his wife and his three sons, but also amongst the sons of the sons of the deceased and wives of the sons of the deceased. The contention was that if all the shares were worked out on the aforesaid basis, the share of the lineal descendants which could be taken into account for the purpose of rate would come to 27/60. The Assistant Controller did not accept the contention of the accountable person and holding the same to be at 3/5ths, as against 27/60, determined the principal value of the estate of the deceased for rate purposes.
(3.) IN appeal, the judgment of the Assistant Controller on the point aforesaid was reversed and 27/60, as the share of the lineal descendants was included while determining the principal value of the estate of the deceased. IN second appeal, the INcome-tax Appellate Tribunal took the same view holding that 27/60 and not 3/5ths was includible for rate purposes under Section 34(1)(c) of the Act. It was thereafter on the reference application made by the Revenue that this case has come to this court. Section 34 lays down that for the purposes of determining the estate duty payable on the estate of the deceased, all the property passing or which is deemed to pass on the death of the deceased shall be aggregated so as to form one single estate and duty shall be payable at the proper graduated rate given in the First Schedule on the principal value determined in accordance with Section 35 of the Act. The relevant Clause of Section 34(1), with which we are concerned, is Clause (c). It is quoted below : "34. Aggregation.--(1) For the purpose of determining the rate of the estate duty to be paid on any property passing on the death of the deceased,-- (c) in the case of property so passing which consists of a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law, also the interest in the joint family property of all the lineal descendants of the deceased member ; shall be aggregated so as to form one estate and estate duty shall be levied thereon at the rate or rates applicable in respect of the principal value thereof." ;