V PRAMILA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The Appellate Tribunal, Bangalore Bench, under S.64(1), Estate Duty Act, 1953 (hereinafter called the Act), has stated a case and referred the following question for the opinion of this Court : " Whether on the. facts and in the circumstances of the case the estate duty payable by the accountable persoA is deductible in computing the net principal value of the estate of the deceased? "

(2.) One Varadaraja Setty died on 6-5-1965. The Accountable Person filed return before; the Assistant Controller of Estate Duty in which he. claimed that a sum of Rs.2,59,757 should be deducted from the principal value of the estate. The said sum of Rs.2,59,757 included a sum of Rs.2,500 being the estimate of the estate duty payable by the Accountable Person. The Assistant Controller disallowed the claim for deduction of the amount of estate duty. The Appellate Controller of Estate Duty as also the Appellate Tribunal affirmed that part of the order of the Assistant Controller on tha ground that estate duty payable by the Accountable Person is not a debt or encumbrance corning within the scope of S.44 of the Act. The short question that arises for decision is whether in determining the value of an estate for the purpose of estate duty allowance or deduction shall be made for estate duty under S.44 of the Act.

(3.) Sec.5(1) of the Act is the charging section which charges to duty all property which passes on the death of a person, the duty being determined on the principal value of the property so passing ascertained in the manner provided by the Act. S.36 (1) of the Act provides that the principal value of any property shall be estimated to be the price which, in the opinion of the Controller, it would fetch, if sold in open market at the time of his death. Ss. 44 to 50B which come under Part VI provides for deductions in determining the value of an estate for the purpose of estate duty. S.44 which is the material section reads thus : Sec. 74(1) of the Act provides that the estate duty payable in respect of property passing on the death of the deceased shall be a first charge, on property liable thereto. The said sub-section reads :