Bombay High Court
Commissioner Of Wealth-Tax vs Executors Of The Will Of Late Shri ... on 7 June, 1990
Equivalent citations: [1990]186ITR254(BOM)
Author: Sujata Manohar
Bench: Sujata Manohar
JUDGMENT T.D. Sugla, J.
1. The Tribunal has referred to this court the following question of law for opinion under Section 27(1) of the Wealth-tax Act, 1957 :
"Whether, on the facts and in the circumstances of the case, the refund under Section 50B of the Estate Duty Act, 1953, not having been determined on each one of the. valuation dates does not become an asset and hence not includible in the total wealth of the assessee for each one of the three relevant assessment years in question ?"
2. The reference is at the instance of the Revenue. The years involved are the assessment years 1970-71, 1971-72 and 1972-73, the valuation dates being December 31, 1969, December 31, 1970, and December 31, 1971, respectively. The assessees are the executors of the will of late Shri Maneklal Premchand who died on March 24, 1969. The estate duty assessment in respect of the estate was completed on September 29, 1973. By an order of rectification dated November 22, 1973, under Section 35 of the Estate Duty Act, 1953, the accountable persons (the assessees herein) were allowed a refund of Rs. 3,15,287 under Section 50B of the Estate Duty Act.
3. The Wealth-tax Officer took the view that to the extent of the amount the accountable persons received by way of refund of estate duty under Section 50B, the estate duty liability provided for in the books required to be adjusted. Accordingly, he completed the assessments by taking estate duty liability to be the amount provided for in the books less the amount of refund for computing the net wealth. The Appellate Assistant Commissioner accepted the assessee's claim that the refund of estate duty was subject to the finalisation of estate duty assessment and fulfilment of other conditions prescribed under Section 50B, and that the refund was not determined before the valuation dates and, therefore, the liability to estate duty was not to be reduced by the amount of refund.
4. The Tribunal dismissed the departmental appeal. It held that the amount payable as refund under Section 50B of the Estate Duty Act had crystallised only after- the order of rectification dated November 22, 1973. This order was obviously long after the valuation dates involved herein. Accordingly, the Tribunal upheld the orders of the Appellate Assistant Commissioner and dismissed the departmental appeals.
5. In response to a query from the Bench, Shri Jetley fairly stated that refund under Section 50B of the Estate Duty Act depended on a number of factors such as (i) transfer of any property on which estate duty is leviable ; (ii) payment of income-tax on capital gains arising from such a transfer ; and (iii) payment of estate duty out of the proceeds of transfer. If all these conditions are satisfied, estate duty is reduced by a sum which bears to the total amount of tax on capital gains so arising the same proportion as the amount paid towards estate duty out of proceeds of the transfer. On the face of it, refund under Section 50B of the Estate Duty Act, thus, would crystallise on the passing of the order of refund only. That apart, there is no material on record to indicate as to when was the property sold, what was the capital gains thereon, when and how much income-tax was paid on capital gains arising therefrom and when was the application for refund under Section 50B made, etc. In the circumstances, it is not even otherwise possible to determine the date when the accountable persons became entitled to the refund of estate duty. If determination of this date is not possible, the question cannot obviously be answered.
6. Accordingly, the question is returned unanswered.