NATARAJAN R Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS reference has been made by the Tribunal under Section 64(1) of the E.D. Act, raising the following question :

(2.) THE deceased, Ranganayaki Ammal, was the owner of a building at Jeremiah Road, Madras. She occupied 2/3rds portion thereof for her residence and the remaining 1/3rds of the property was let out. THE contention raised before the Asst. Controller was that the exemption under Section 33(1)(n) of the Act was allowable to the full extent of Rs. 1,00,000. THE Asst. Controlled took the view that the relief was restricted to the proportionate value of the portion under the occupation of the deceased. This view of the Asst. Controller was confirmed by the Appellate Controller. THE executor appointed under the will left by the said Ranganayaki Ammal took the matter in appeal to the Tribunal. THE Tribunal was of the view that the exemption under Section 33(1)(n) of the Act was only in respect of a proportionate part of the portion under the occupation of the deceased. Thus, the order of the Asst. Controller, as confirmed by the Appellate Controller, was upheld. THE present reference has been made at the instance of the accountable person (the executor), who challenges the aforesaid conclusion of the Tribunal.

(3.) THE result of reading this provision in this manner would be to justify me claim of exemption even to the extent of more than rupees one lakh, so long as the deceased was in occupation of only a portion of the house. In other words, the result will be startling. If the deceased had occupied the whole of the house, then the provision would require exemption being granted only to the extent of rupees one lakh. If the deceased occupied only a part of the house, then the exemption would have to be with reference to the entire value of the property, as there is nothing to restrict it to any proportionate part of the house. THE case would fall within the closing portion of the provision. Even though the learned counsel submitted that he did not want the exemption to cover more than rupees one lakh, still the effect of his argument would be to claim exemption for the entire value of the house. In our opinion, the provision requires to be read in two parts. THE first part is :