B N CHAKRAVARTY Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) AT the instance of the legal heirs of Shri B. N. Chakravarty who are (hereinafter referred to as 'the accountable person'), and deceased, respectively, the following question has been referred under Section 64(1) of the Estate Duty Act, 1953 (in short, 'the Act'), by the Income -tax Appellate Tribunal, Delhi Bench 'B', New Delhi (in short, 'the Tribunal'), for the opinion of this court :

(2.) THE dispute relates to non -allowance of the deduction of Rs. 1 lakh under Section 33(1)(n) of the Act. The first accountable person, Smt. Indira Chakravarty, died on March 15, 1978, after the death of the deceased Shri B. N. Chakravarty on March 26, 1976. thereforee, their son, Shir S. N. Chakravarty (hereinafter referred as 'the present accountable person'), was considered to be the accountable person. In the estate duty account submitted by the accountable person, it was claimed that house property at 19G, Maharani Bagh, New Delhi, was partly on rent and partly used for own residence and accordingly exemption was claimed. The Assistant Controller of Estate Duty (in short, 'the Assistant Controller'), observed that the claim was not established. He observed that the deceased was the Governor of Haryana and continued to hold this post till his death at Chandigarh. He noticed that, at no point of time, he or any member of his family was residing in the house. He held that the mere fact that near about the date of death, a part of the house was lying vacant did not mean that it was self -occupied or kept for self occupancy. Accordingly, the claim for self -occupancy was rejected and the full value of the house was added to the estate. In appeal before the Appellate Controller of Estate Duty (in short, 'the Appellate Controller'), it was pointed out that the rear portion of the house was exclusively used by the deceased for his residence and the front portion was let out. It was explained that the rear portion, which was fully furnished was never let out since May 1, 1973, although prior to that date, the front as well as the rear portion were let out. The term of the deceased as the Governor of Haryana came to an end some time in September, 1972, and thereafter, he would have come to stay in the house. thereforee, it was pointed out that the rear portion was not let out but was kept ready for personal use of the deceased. Reliance was also placed on a letter dated January 8, 1982, written by then Chief Minister of Haryana in this regard. The Appellate Controller, noticed that the deceased had claimed vacancy allowance under Section 24(1)(i) of the Income -tax Act, 1961 (in short 'the IT Act'), for the assessment years 1974 -75 and 1975 -76 in respect of the rear portion and he did not claim any deduction under Sub -sections (2) and (3) of Section 23 of the Income -tax Act. He, however, noticed that for the assessment year 1976 -77, deduction was claimed by Smt. Indira Chakravarty under Section 23(2) of the Act for self -occupation on the ground that she shifted to the house after the death of the deceased. In the aforesaid background, it was held that in order to be entitled to the claim the house should be in self -occupancy and not merely in the possession of the deceased. He upheld the view of the Assessing Officer. The matter was carried in further appeal before the Tribunal by the present accountable person. The stand before the lower forums was reiterated before the Tribunal. Considering the language of Section 33(1)(n) of the Act, the Tribunal held that mere keeping of the house ready for personal use of the deceased did not meet the requirements of law.

(3.) WE have heard learned counsel for the parties. Learned counsel for the present accountable person submitted that the Tribunal should have adopted a pragmatic view, that has to be taken in a case of this nature and has placed reliance on materials which have no relevance. Learned counsel for the Revenue, on the other hand, submitted that the language of Section 33(1)(n) of the Act is clear and, thereforee, the Tribunal's view cannot be faulted.