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Controller of Estate Duty, Karnataka Vs. N. Ramachandra Bhat - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberTax Reference Case Nos. 147 and 148 of 1977
Judge
Reported in[1980]123ITR841(KAR); [1980]123ITR841(Karn)
ActsEstate Duty Act, 1953 - Sections 7(1), 33, 33(1), 34 and 39
AppellantController of Estate Duty, Karnataka
RespondentN. Ramachandra Bhat
Appellant AdvocateS.R. Rajasekhara Murthy, Adv.
Respondent AdvocateG. Sarangan, Adv.
Excerpt:
- karnataka scheduled castes & scheduled tribes (prohibition of transfer of certain lands) act, 1978, sections 3(e) & 4: [arali nagaraj,j] usufructuary mortgage of granted land validity - suit for permanent injunction against defendants restraining them from interfering with taking of the yield of fruits from mango trees grown in the lands in question - defendants suit for declaration that the registered sale deed dated 18.2.1987 as null and void - transfer of land covered under the ptcl act - held, though the said transaction is described as sale and though the document is described as sale deed in substance the said transaction was one of usufructuary mortgage with possession of the said land and the said mango trees grown thereon entitling the plaintiff to enjoy te fruits of the..........the asst. ced, it was contended by the accountable person that only 1/4th interest in the joint family property passed on the death of govinda bhat on the basis that the wife of govinda bhat also had a share in the joint family property. the asst. ced rejected the said contention. the appellate ced also rejected it in the appeal filed by the accountable person. aggrieved by the order of the appellate controller, the accountable person filed an appeal before the tribunal, bangalore bench. in that appeal, in addition to the contention referred to above, he raised a further contention that by virtue of s. 33(1)(n) of the act, the value of the interest of the lineal descendants in the residential house in which the deceased was living, was also not liable to be included for the purpose of.....
Judgment:

Venkataramaiah, J.

1. These cases arise out of the estate duty proceedings consequent upon the death of one N. Govinda Bhat who dies on February 15, 1972. N. Govinda Bhat was governed by the Madras School of Mitakshara. He died leaving him, his widow and two sons. Before his death he was the manager of a joint Hindu family, consisting of himself and his two sons. In these proceedings we are concerned with the coparcenary interest passing on his death. Before the Asst. CED, it was contended by the accountable person that only 1/4th interest in the joint family property passed on the death of Govinda Bhat on the basis that the wife of Govinda Bhat also had a share in the joint family property. The Asst. CED rejected the said contention. The Appellate CED also rejected it in the appeal filed by the accountable person. Aggrieved by the order of the Appellate Controller, the accountable person filed an appeal before the Tribunal, Bangalore Bench. In that appeal, in addition to the contention referred to above, he raised a further contention that by virtue of s. 33(1)(n) of the Act, the value of the interest of the lineal descendants in the residential house in which the deceased was living, was also not liable to be included for the purpose of rate under s. 34(1)(c) of the Act. The Tribunal held that the entire value of the residential house had to be excluded from consideration both under s. 34(1)(a) and under s. 34(1)(c), in view of s. 33(1)(n) of the Act. But the contention of the accountable person that the wife had also a share in the joint family property during the lifetime of Govinda Bhat was rejected. Thereupon, at the instance of the department, the following question of law has been referred to us under s. 64(1) of the Act :

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the exemption under section 33(1)(n) of the Estate Duty Act, 1953, should be given effect to while computing the principle value of the estate of the Hindu undivided family ?'

2. At the instance of the accountable person, the following question has been referred :

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the wife of the deceased had no share in the Hindu undivided family property and also no amount was to be allotted towards maintenance ?'

That is how there are two references before us.

3. In CED v. K. Nataraja (TRC No. 6 of 1973 decided on July 19, 1978), since reported in : [1979]119ITR769(KAR) , we have held while answering a question similar to the first question in the following way (at page 781) :

'Section 33(1)(n) of the Act has no relevance to the computation of the value of the interest of the deceased in the coparcenary property under s. 39. Where the residential house belongs to a HUF governed by Mitakshara, only the share of the deceased in such house is exempt from estate duty under s. 33(1)(n). For purposes of rate of estate duty, the value of the share of the deceased in such house has to be be excluded from the value of the property passing on his death under s. 34(1)(a), but the value of the share of all the lineal descendants of the deceased in the coparcenary property including the residential house has to be aggregated under s. 34(1)(c) without any reference to any exemption under s. 33(1)(n) of the Act'.

We, therefore, answer the first question arising in these proceedings in similar terms.

4. The second question relates to the contention of the accountable person that on the death of N. Govinda Bhat, only 1/4the of share in the coparcenary property passed and not 1/3rd as held by the authorities under the Act. This contention is based on the assumption that the wife of Govinda Bhat had a share in the family property before his death. Since it is admitted that the joint family in question was governed by the Madras School of Mitakshara law, it has to be held that the wife of Govinda Bhat had no share in the family property during his lifetime. The computation of the value of his interest in the coparcenary property passing on his death has to be made in accordance with s. 7(1) read with s. 39 of the Act on the basis that a notional partition had taken place just before his death. As there were three males, i.e., Govinda Bhat and his two sons in the coparcenary, each of them was entitled to 1/3rd share in the coparcenary property. The fact that the wife was entitled to a share in the assets of the deceased after his death would not make any difference. The finding of the Tribunal that 1/3rd share in the coparcenary property passed on the death of Govinda Bhat has, therefore, to be upheld.

5. It is however, argued by Sri. G. Sarangan, learned counsel for the accountable person, that since the wife of the deceased had a right to claim maintenance during his lifetime, some reasonable deduction should be made in the value of the estate passing on the death of the deceased. The nature and incidents of the right of maintenance of a Hindu wife or widow has been explained by this court in Anandi Bai v. Sonabai Mahadev [1973] 2 Mys LJ 267. A Division Bench of this court has held in that case that the right of maintenance is a personal right, which can be enforced against the property of the family by the creation of a charge on it, but is not proprietary in character and the claim by itself does not amount to a charge until it is fixed by a court or agreement between the woman and the holder of the estate. In the instant case there is no plea that there was any such decree of a court or agreement. In these circumstances, no allowance can be made in lieu of the maintenance right of the wife in this case.

The second question referred to us is answered in the affirmative.

6. These two cases are disposed of accordingly. No costs.


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