D SRAJALAKSHMAMMA Vs. ASSISTANT CONTROLLER OF ESTATE DUTY INCOME TAX CUM ESTATE DUTY CIRCLE

JUDGEMENT

(1.) The point that arises for determination in this petition is whether the Assistant Controller of Estate Duty (who will be hereafter referred to as "the Assistant Controller") was within his powers in rectifying the original order of assessment as per his order dated May 18, 1961. It is the validity of this order that is being challenged in these proceedings.

(2.) One D. T. Srinivasa Setty was partner in two firms, viz., Messrs. Devatha Venkatramaiah & Sons and Messrs. Ramalaxman & Co. Each of these firms had three partners. Srinivasa Setty died on June 26, 1957, leaving behind him the petitioner as his heir. The books of account of the two partnership firms were produced before the Assistant Controller. In computing the value of the estate left by the deceased, the Assistant Controller left out of account : (1) the charity fund, (2) the reserve fund and (3) the fund in the khatha of God's account. No reasons were assigned by the Assistant Controller for excluding from consideration these funds in valuing the estate left by the deceased. From the records of the case, it is seen that the Assistant Controller was aware that there were partnership deeds evidencing the terms of the partnerships mentioned above. But these deed had not been produced before him nor did the petitioner plead before him that she had no share in those funds. But yet, the Assistant Controller did not take into consideration the share of the deceased in those funds. Evidently, he overlooked the fact that the deceased was entitled to a share in those funds.

(3.) The original assessment order was made on January 31, 1958, by the Assistant Controller, His successor called upon the petitioner on July 27, 1959, to produce the copies of the partnership deed relating to the firms mentioned above. Those partnership deeds were accordingly produced. After perusing the partnership deed, the Assistant Commissioner intimated the petitioner on November 5, 1960, that on a scrutiny of the accounts it was found that there was substantial reserve fund and other sundry accounts like God's a/c, Charity a/c, etc., and that the deceased's share in the reserve fund, Charity a/c. and God's a/c., etc.in the two firms amounted to Rs. 20,947, but the same had not been included in the estate of the deceased. He further informed the assessee-petitioner as follows :