Law:

Section:

Section 5 of the Estate Duty Act, 1953, read with rule 7(c), of the Estate Duty Rules, 1953 - Property passing on death - Properties in question had originally been owned by joint family consisting of deceased and his two sons - On 12-4-1954, they put an end to joint family status and discontinued business of joint family and started a partnership business as and from 13-4-1954, and all assets and liabilities of quondam joint family had been transferred to firm - Whether though immovable properties were treated as partnership assets but only deceased's share in partnership could only be treated as movable property under rule 7(c) and could be brought to tax under section 5 - Held, yes FACTS The deceased was domiciled in India at the time of his death. On the death of the deceased, his sons, who were accountable persons under the Act, filed an account of the estate of the deceased. The Assistant Controller determined the principal value of the estate at Rs. 6,46,434 and the estate duty payable there on at Rs. 79,727. The accountable persons questioned the said determination of the principal value and contended that out of the principal value Rs. 6,46,434, a sum of Rs. 4,66,373 represented the value of the deceased's share in foreign immovable properties and, therefore, the inclusion of the said value in the principal value was not proper. But the Assistant Controller found that the deceased and his two sons, who originally constituted a HUF, owned extensive properties in India and abroad and a business of money-lenders and land-lenders and land-owners in Kuala Lumpur, Malaya and Singapore; that on 12-4-1954; they had put an end to the joint family status and discontinued the business of the joint family and started a partnership business as and from 13-4-1954; and that all the assets and liabilities of the quondam joint family had been transferred to the firm. He also found that the said sum of Rs. 4,66,373 represented the share of the deceased in the firm; that by the application of rule 7(c) of the Estate Duty Rules, 1953, the share of the deceased in the partnership should be taken to be movable property even though the firm owned immovable properties and…

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