Estate duty and contingent tax refunds: post-death refund right under section 80K was not property passing on death.

For estate duty purposes, property must exist as a legally enforceable right at the date of death and must pass on death. A post-death refund claimed under section 80K of the Income-tax Act was held not to satisfy that requirement because the deceased's entitlement depended entirely on the unresolved outcome of the company's section 80J claim at the time of death. The refund right arose only later, after relief and certificates were issued, so it was merely a contingent hope rather than accrued property. The refund was therefore not includible in the principal value of the estate under the Estate Duty Act.

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Issues: Whether the refund received after the deceased's death under section 80K of the Income-tax Act, 1961 constituted property passing on death and was includible in the principal value of the estate under the Estate Duty Act, 1953.

Analysis: The charging scheme under sections 5 and 6 of the Estate Duty Act, 1953 applies only to property that exists at the time of death and passes on death. The term "property" in section 2(15) is of wide import, but it still requires a legally existent right or interest capable of passing at the time of death. On the facts found, the deceased's entitlement to any refund under section 80K depended entirely on the uncertain fate of the company's claim under section 80J, which was unresolved at the date of death. The claim for refund itself arose only after the company obtained relief and certificates were issued subsequently. The case was therefore one of a contingent hope, not an accrued enforceable right.

Conclusion: The refund of Rs.2,27,681 did not constitute property passing on the death of the deceased and was not liable to be included in the principal value of the estate; the answer was rendered in favour of the accountable person and against the Revenue.

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