CONTROLLER OF ESTATE DUTY Vs. NATARAJA K

JUDGEMENT

(1.) ONE T. Karibasappa was the karta of a HUF governed by Mitakshara law consisting of himself and his three sons. He died on October 24, 1965. He owned some separate property in addition to one fourth share in the joint family property which consisted of a residential house of the value of Rs. 80,000. The Assistant CED computed the liability of estate duty payable in respect of the estate of Karibasappa under the E. D. Act, 1953 (hereinafter referred to as "the Act") as follows : <FRM>JUDGEMENT_769_ITR119_1979Html1.htm</FRM>

(2.) ACCORDINGLY, estate duty was calculated and levied by the Assistant Controller. On appeal, the Appellate CED held that while determining under s. 39 of the Act the value of the share of the deceased, Rs. 80,000 which was the entire value of the residential house should, in view of s. 33(1)(n) of the Act, be first deducted and no part of its value should be taken into consideration even for purposes of s. 34(1)(c) of the Act. ACCORDINGLY, he allowed the appeal of the accountable person. The Income- tax Appellate Tribunal, Bangalore Bench, dismissed the appeal of the department. At the instance of the department, the following question of law is referred to this court under s. 64(1) of the Act :

(3.) THE relevant provisions of the Act which arise for consideration in this case are ss. 5, 7(1), 33(1)(n), 34(1)(a) and (c) and 39 of the Act. Sections 5 and 7(1) are in Part II of the Act which contains provisions relating to imposition of estate duty. Section 33(1)(n) is in Part III containing exceptions from the charge of duty. Section 34(1) is in Part IV dealing with aggregation of property and rates of duty and s. 39 is in Part V dealing with the principles governing the valuation of the property and interest of the deceased for purposes of levy of duty.