Skip to content


Controller of Estate Duty Vs. Late Harisinghji (Through Accountable Person Raja Pratap Singhji) - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtRajasthan High Court
Decided On
Case NumberD.B. Estate Duty Reference Case No. 50 of 1972
Judge
Reported in[1980]126ITR438(Raj)
ActsEstate Duty Act, 1953 - Sections 5; Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 - Sections 27; Rajasthan Land Reforms and Resumption of Jagirs Rules, 1954 - Rule 37D
AppellantController of Estate Duty
RespondentLate Harisinghji (Through Accountable Person Raja Pratap Singhji)
Appellant Advocate S.M. Mehta, Adv.
Respondent Advocate U.R. Bhandari and; R.P. Garg, Advs.
Cases ReferredRaja Harisinghji. In Mahmuddin Nisa Begum v. Board of Revenue
Excerpt:
- - controller as well as by the appellate controller of estate duty......of kuchaman was a jagirdar of kuchaman, an erstwhile jagir in jodhpur. the jagir of late raja harisinghji was resumed on 1st july, 1954, under the provisions of the rajasthan land reforms and resumption of jagirs act, 1952 (hereinafter referred to as ' the act '). the jagirdar died on 15th january, 1956. his legal heirs and accountable persons, for purpose of estate duty, were his widow, rani dariyab kanwar, his brother, raja pratap singh, who was adopted by rani dariyab kanwar as a son and his minor daughter, miss snehprebha, through her guardian, rani dariyab kanwar. the dy. controller of e.d. included in the value of the estate of the deceased, compensation receivable by the maintenance-holder, dariyab kanwar, on the resumption of his jagir. an argument was advanced by the.....
Judgment:

Kasliwal, J.

1. This is a reference under Section 64(1) of the E.D. Act, 1953.

2. Late Raja Harisinghji of Kuchaman was a jagirdar of Kuchaman, an erstwhile jagir in Jodhpur. The jagir of late Raja Harisinghji was resumed on 1st July, 1954, under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 (hereinafter referred to as ' the Act '). The jagirdar died on 15th January, 1956. His legal heirs and accountable persons, for purpose of estate duty, were his widow, Rani Dariyab Kanwar, his brother, Raja Pratap Singh, who was adopted by Rani Dariyab Kanwar as a son and his minor daughter, Miss Snehprebha, through her guardian, Rani Dariyab Kanwar. The Dy. Controller of E.D. included in the value of the estate of the deceased, compensation receivable by the maintenance-holder, Dariyab Kanwar, on the resumption of his jagir. An argument was advanced by the accountable persons that the compensation payable to the widow, under Section 27 of the Act, should not have been included in the total value of the estate of the late jagirdar. However, this contention was negatived by the Dy. Controller as well as by the Appellate Controller of Estate Duty. This contention was also raised on behalf of the accountable persons in appeal before the Income-tax Appellate Tribunal, Bombay Bench ' B ', that the maintenance allowed to Rani Dariyab Kanwar, under the provisions of Section 27, I.T. Act, should be excluded from the dutiable estate of the deceased. This contention was accepted by the Tribunal which held that the amount of Rs. 1,08,000 represented the commuted value of the annual maintenance amount of Rs. 7,200 allowed to Rani Dariyab Kanwar by virtue of an order of the Jagir Commissioner dated 7th May, 1958. The Controller of Estate Duty, Rajasthau, Jaipur, moved an application requiring the Income-tax Appellate Tribunal to draw up a statement of the case and refer the following question of law having arisen out of the order of the Income-tax Appellate Tribunal dated 16th July, 1971.

' Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs. 1,08,000 representing the commuted value of the maintenance allowance payable to the widow of the deceased could not form part of the dutiable estate of the deceased '

3. Mr. Mehta, learned counsel for the revenue, has contended that the amount of Rs. 1,08,000 has been paid to Smt. Dariyab Kanwar out of the amount of compensation payable to late Raja Harisinghji and as such this amount falls within the property of the deceased, Harisinghji, within the meaning of Section 5 of the E.D. Act, 1953. Learned counsel further submitted that the amount of Rs. 1,08,000 has not been paid to Dariyab Kanwar in her own right but the amount has been paid to her as the successor and heir of late Raja Hari Singhji. It was also argued that the Jagir Commissioner was wrong in allowing the amount of maintenance out of the compensation payable to the jagirdar under Section 27 of the Act.

4. We find no force in the above submissions of Mr. Mehta. Section 27 of the Act permits any person, who under any existing jagir-law, is entitled to receive maintenance allowance out of the income of any jagir, to receive it out of the compensation payable to the jagirdar and this amount of maintenance is allowed to a person who used to receive from the jagirdar such maintenance allowance before the date of resumption of his jagir or was entitled to receive it. Under Rule 37D of the Rajasthan Land Reforms and Resumption of Jagirs Rules, 1954, the Jagir Commissioner has to determine the persons entitled to receive maintenance allowance and the amount to be paid to them under Section 27 of the Act. This is to be determined after making an inquiry and also considering the objections, if any, filed by the jagirdar. It is not disputed in the present case that an order was passed by the Jagir Commissioner on 7th May, 1958, allowing a sum of Rs. 1,08,000 towards the maintenance allowance out of the amount of compensation payable to the jagirdar under Section 27 of the Act read with Rule 37D of the Rules. Learned counsel for the revenue cannot challenge the order of maintenance passed by the Jagir Commissioner under Section 27 of the Act and we have to only determine whether such amount payable to Dariyab Kanwar would be chargeable under the E.D. Act as the property of late Raja Harisinghji. In Mahmuddin Nisa Begum v. Board of Revenue, Rajasthan [1959] ILR 9 Raj 1043, a Bench of this court, while dealing with the provisions of Section 27 of the Act, observed as under :

' Applying this test to the present case, we have no doubt that the language of Section 27 is plain enough. It provides for the grant to the dependants of a jagirdar of maintenance allowance from the compensation and rehabilitation grant payable to the jagirdar when his jagir has been resumed. It is further provided by the section that such a person, before he can be held entitled to receive such maintenance, must be entitled to receive it under any existing jagir law at the date of the resumption of the jagir. The section nowhere provides (in addition to what has been pointed out above) that the claimant should also have been in receipt of any maintenance allowance out of the income of the jagir concerned at the date of the resumption of the jagir.'

5. It is thus for the Jagir Commissioner to decide under Section 27 whether a person is entitled to receive such maintenance, payable under any existing jagir law at the date of the resumption of the jagir. As already observed above, under Section 27 a person is entitled to the amount of maintenance which that person used to receive from the jagirdar before the date of resumption or even when such person was entitled to receive the same. The Jagir Commissioner has held that Mst, Dariyab Kanwar was entitled to claim maintenance out of the compensation payable to the jagirdar under Section 27 of the Act and as such the same cannot be challenged by the revenue under the E.D. Act. Section 5 of the E.D. Act, 1953, is the charging section and under this section the estate duty is payable on the principal value of all property, settled or not settled, which passes on the death of a person dying after the coming into force of the Act, i.e 15th October, 1953. Thus, the estate duty can be charged on a property which passes on the death of a person, i.e., late Raja Harisinghji in this ease. In our view, the amount of Rs. 1,08,000 allowed to Dariyab Kanwar under Section 27 of the Act by the Jagir Commissioner cannot be considered to be a property which passed into the hands of Dariyab Kanwar on the death of late Raja Harisinghji. This amount has been allowed to Dariyab Kanwar under the provisions of Section 27 of the Act and not by virtue of any succession or inheritance of late Raja Harisinghji. It may also be mentioned that the real and primary object underlying the provisions of Section 27 of the Act is to make a reasonable provision for the dependants of an expropriated jagirdar in the way of their maintenance, so that they may not be left completely stranded owing to the resumption of the jagir, from the income whereof they were being maintained by the jagirdar before the resumption of the jagir and to this benefit they were entitled, according to law or a valid custom having the force of law. We may further point out that this amount of maintenance determined under Section 27 of the Act is payable even during the lifetime of a jagirdar whose jagir is resumed. Though this amount is paid out of the compensation payable to the jagirdar on account of the resumption of his jagir yet this amount, cannot be said to be a property which passes on the death of a person dying after the commencement of the Act, i.e., 15th October, 1953, as envisaged under Section 5 of the E.D. Act. Such maintenance allowance allowed under Section 27 of the Act is a personal allowance and cannot be the subject-matter of succession, nor can a maintenance-holder transfer his maintenance allowance to any other person. We posed a question to Mr. Mehta, learned counsel for the revenue, that had Raja Harisinghji been alive then also this amount of Rs. 1,08,000 was to be paid out of the total amount of compensation payable to Raja Harisinghji and in that case only the remaining amount would have gone to the hands of Raja Harisinghji and after his death only the amount actually received by him would leave become his property liable to estate duty. If that be so, the amount of maintenance payable to Dariyab Kanwar, whether during the lifetime of Raja Harisinghji or after his death, should not make any difference for the purpose of levying estate duty. Mr. Mehta could not make any distinction in the above two situations and to our mind this amount of maintenance determined under Section 27 of the Act is payable to Dariyab Kanwar in her own right allowed under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act. As Dariyab Kanwar is not claiming this amount by way of succession or inheritance, nor does this amount pass on the death of Raja Harisinghji as contemplated under Section 5 of the E.D. Act, such amount has been rightly held by the Tribunal as being not includible in the estate of late Raja Harisinghji.

6. In the result, we answer the question in the affirmative and hold that the Tribunal was right in holding that the amount of Rs. 1,08,000, representing the commuted value of the maintenance allowance payable to the widow of the deceased, could not form part of the dutiable estate of the deceased in the facts and circumstances of this case. In the facts and circumstances of the case, the parties are left to bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //