CLARENCE PAIS Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Bangalore Bench, has referred the following two questions for the opinion of this court :

(2.) THE matter relates to the computation of estate duty payable in respect of the estate of one Raghupathy Hebbar, who passed away on October 20, 1967. He left a will dated August 19, 1967. THE executors appointed under the will were the accountable persons and they filed the returns. THE dispute relates to two parcels of lands -

(3.) SO far as the paddy lands were concerned, it is seen from the order of the Special Deputy Commissioner for Inams Abolition that the title of the vendor of the deceased in regard to survey No. 596 was rejected, and the land was reserved to the Government. However, the matter had been taken up in appeal to the Karnataka Appellate Tribunal. But merely on that account, it cannot be said that the title of the deceased in regard to this particular item was perfect. As matters stood. There was a cloud on the title of the deceased to the property. If the Appellate Tribunal upheld the title of the vendor, then, the full value of the property as computed by the Appellate CED was liable to be charged for estate duty. Otherwise, only the right of the deceased to claim or to sue for the return of the purchase money would have to be valued and included in the computation of the value of the estate passing on the death. That would depend upon various factors as to the solvency of the vendor, cost of litigation and the defence that may be put forth by the vendor or his representatives. That value would be only a national one and would have to be estimated in a reasonable manner having regard to all the circumstances. From the facts it is clear that in regard to one land, survey No. 595, which was about 5 acres and about one-third in extent compared to the other survey No. 596, the title had been upheld by the Special Deputy Commissioner for Inams Abolition and Proportionate value of the same on the basis of the estimate made by the Appellate CED would have to be included in the value of the estate. Therefore, on the facts and circumstances of this case, the first question is answered as follows :