V.K.SINGHAL, J. - (1.) THE Tribunal has referred the two questions of law arising out of its order dt. 23rd Dec., 1982, under S. 64(1) of the ED Act, 1953 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was 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 under S. 34(1)(c) of the ED 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 S. 36(1) of the ED Act, 1953 -
(2.) THE facts, as stated by the Tribunal, are that the deceased was a member of a smaller HUF consisting of himself and his son. The bigger HUF 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 of this property was determined by the Asst. CED at a figure of Rs. 90,000 and accordingly, the one - third share of the deceased worked out to Rs. 30,000. Out of this one -third share, the Asst. CED held that the property being a joint HUF property of the smaller Hindu undivided family consisting of the deceased and his son, the share of the deceased would come to Rs. 15,000. The exemption was granted to this extent under S. 33(1)(n). For the purpose of rate of duty, the entire value of this one -third share was taken into consideration under S. 34(1)(c) as the remaining Rs. 15,000 was the share of the lineal descendants, i.e., the son of the deceased. The Appellate Controller allowed the appeal following the decision of the Allahabad High Court in Badri Vishal Tandon vs. CED (1982) 30 CTR (All) 316 : (1982) 136 ITR 427 (All). The order of the Appellate Controller was upheld by the Tribunal. The Tribunal found that there are conflicting views on this issue. The argument of the standing counsel on this point were heard. The matter stands concluded by the decision of this Court in the case of CED vs. Smt. Nirmala Saxena (1995) 125 CTR (Raj) (1995) 214 ITR 566 (D. B. ED Ref. No. 112 of 1983) decided on 4th Jan., 1995, in which it was held by this Court that the value of the share of the lineal descendants of the deceased in the coparcenary property has to be aggregated with the principal value of the estate of the deceased for the purposes of rate of duty under S. 34(1)(c) of the ED Act, 1953. Under S. 33(1)(n), only the share of the deceased in the residential house belonging to the HUF is exempt from estate duty, because a notional partition of the HUF property immediately before death is assumed and the value of that share is determined. Exemption under S. 33 is permissible only to such share because that share alone passes on death.
(3.) IN view of the above decision of this Court, we are of the view that the 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 under S. 34(1)(c) of the ED Act, 1953. So far as the facts of the second question are concerned they are that the deceased was a partner in the firm, M/s Khetawat Cine Traders. This firm had lands and buildings, etc. According to the Asst. Controller, the value of the building in the asst. year 1976 -77 was taken at a figure of Rs. 1,29,964 and that of the land at Rs. 93,990 apart from the value of the road at Rs. 5,000. The value of the building was the depreciated value and according to the Asst. CED, the value of the land and building and road on the date of death of the deceased was much more than the value appearing in the books of the firm in which the deceased had a 21 per cent. share. Taking into consideration the increase in the value of such assets, the Asst. CED considered an addition of Rs. 30,000 towards the 21 per cent. share of the deceased in the accretion in the value of the above assets of the firm and included the same in the principal value of the estate passing on his death. In the appeal preferred before the Appellate Controller of Estate Duty, it was found that the Asst. CED has taken the value of the share as per the balance -sheet, but it is obvious from that assessment order that the addition is made only for difference in value of land, building and road belonging to the firm, M/s Khetawat Cine Traders. The value of share as per the balance -sheet was considered to be the correct one and the addition was accordingly deleted. The order of the Appellate CED was challenged before the Tribunal where, on the basis of cl. (4) of the partnership deed dt. 22nd Dec., 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.;