GOVIND PRASAD Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) IN connection with the estate duty assessment concerning the estate of late Shahu Jagdish Prasad, Sri Govind Prasad, the accountable person, claimed that as the amount of estate duty payable in respect of the estate left by the deceased was a charge on the said estate, it had to be taken into account while determining the market value of the estate. He further claimed that in any case the estate duty leviable on the estate of the deceased being a charge on the estate left by the deceased was an incumberance which had to be allowed as a deduction under Section 44 of the E.D. Act (hereinafter referred to as "the Act"), while determining the taxable value of the estate for the purposes of estate duty. The claim made by the accountable person was rejected by the Asst. Controller and the order passed by him was in this regard eventually upheld by the INcome-tax Appellate Tribunal, Allahabad. However, the INcome-tax Appellate Tribunal has, at the instance of the accountable person, stated the case and has referred the following question for the opinion of this court:

(2.) SECTION 5(1) of the Act lays down that in the case of every person dying after the commencement of the Act, there shall be levied and paid upon the principal value of the property ascertained in the manner provided in the Act, which passes on the death of such person, a duty called estate duty, at the rate fixed in accordance with SECTION 35 of the Act. SECTION 6 of the Act lays down that the property which the deceased was at the time of Ms death competent to dispose of shall be deemed to pass on his death. SECTIONs 7 to 17 of the Act describe certain other properties and the circumstances in which they would also be deemed, for purposes of the Act, to pass on the death of the deceased. SECTION 36 of the Act provides that the principal value of any property shall be deemed to be the price which in the opinion of the Controller it would fetch if sold in the open market at the time of the deceased's death. Thus, the duty payable in respect of the estate of a deceased person has to be worked out in accordance with the provisions contained in the Act after finding out the principal value of the property left by the deceased, that is, the price of the property which could, at the time of the death of the deceased, be fetched if the property was, at that time, sold in the open market.

(3.) AFTER carefully considering the aforementioned observations made by the learned judges of the Mysore High Court as also the submissions made in this regard by the learned counsel appearing for the accountable person, we are of opinion that the aforementioned observations which had been made in connection with the amount of court-fees payable on an application for probate under the Mysore State Court-Fees Act do not offer a correct clue for determining the principal value of the property passing on the death of the deceased, as required by the Act.