1984 (3) TMI 96

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....also his lineal descendants in the firms. The Appellate Controller also agreed on this issue with his predecessor who passed an order dated 5-5-1981 in the case of Shri Mohan Lal (deceased) through A.P. Smt. Kailash Wati. 2. We have heard the rival submissions at length, perused para 7 of the order of the Appellate Controller and the order of his predecessor in the case of Shri Mohan Lal (deceased). In our view, the stand of the revenue is quite correct and both the Appellate Controller fell into error. The Appellate Controller in para 7 has made a number of mistakes about the applicability of provisions of the Estate Duty Act, 1953 (' the Act ') 4 and the Wealth-tax Act, 1957 (' the 1957 Act '). Though he mentions section 5 of the Act, ....

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.... property of the firms in which the partner may have interest. Share in such property of the firm like the capital of the deceased partner will pass on the death of the partner and in this connection, it will be relevant to refer to the definitions given in sections 2(15) and 2(16) of the Act. There is no question of invoking the provisions of section 6 and to apply the test of competency to dispose of. It is because of the nature of the reserves created that under ' the 1957 Act ', these are considered as property of the partners liable to wealth-tax. Reference to the Wealth-tax Rules, 1957 (' the 1957 Rules '), etc., by the Appellate Controller is unwarranted and incorrect. Rule 2A onwards of the 1957 Rules need not be looked into, as the....