Law:

Section:

Section 17(1) of the Estate Duty Act, 1953 - Property transferred to a controlled company - Whether where property transferred by deceased to a controlled company did not belong to him, but to HUF of which he was karta, section 17(1) would not apply to such a case - Held, yes FACTS The deceased died on 18-7-1961. In the course of assessment proceedings' the Assistant Controller found that the deceased, who was carrying on a motor transport business, had transferred that business to a controlled company in 1946 and in consideration of that transfer certain shares were allotted to the deceased and his son in the said company. The three accounting years previous to the death of deceased ended on 15-8-1958, 15-8-1959 and 15-8-1960. The deceased had received certain dividend on 15-8-1958 from the said company which was payable in respect of the accounting year ending on 15-8-1958. The transferred business did not belong to the deceased in his individual capacity, but only to the HUP of the deceased and his sons. The Assistant Controller held that since it was the deceased, who had transferred the said business, section 17(1) was attracted and, therefore, the said dividend having been received within a period of three years preceding his death, the same was to be treated as benefit received by the deceased. He also determined the value of the assets of the said company and arrived at a certain figure as the value of the slice to be included in the estate of the deceased. On appeal, the Tribunal, however, observed that the condition precedent for the applicability of section 17(1) was that the deceased must have made a transfer to the said company and since, in the instant case, the transfer in law was only by the HUF represented by the karta, there was no scope for the application of section 17(1), as there was nothing in section 17 to show that it would be applicable to a transfer made by the deceased not in his individual capacity, but in a representative capacity. On reference, the revenue contended that even though the said business which was transferred to the said company, belonged to the HUF, so long as the joint family continued, the manager, in the present…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492