CONTROLLER OF ESTATE DUTY Vs. RAM LAL AGARWAL

JUDGEMENT

(1.) The Tribunal, Delhi, has referred the following question of law under Section 64(1) of the Estate Duty Act, 1953, hereinafter referred to as the Act, for opinion to this Court :

(2.) Briefly stated, the facts giving rise to the present reference are as follows : Shri Ram Lal Agarwal died intestate on 19th June, 1998. His son Shri Ravinder Kumar Agarwal is accountable person in this case. The deceased had taken a house from UP Avas Avam Vikas Parishad under the hire-purchase tenancy agreement for a sum of Rs. 58,000 on instalment basis. The deceased could pay only one instalment of Rs. 2,650 for this house and the balance of Rs. 55,350 was outstanding against him at the time of his death to be payable to Avas Avam Vikas Parishad. The accountable person claimed exemption in respect of this house which was a residential house under Section 33(l)(n) of the Act and also claimed the deduction of unpaid instalments of Rs. 55,350 against the total value of the estate. The Asstt. CED rejected the contention of the accountable person by holding that the value of the house could be estimated at Rs. 2,650 only on the basis of instalment actually paid by the deceased. This amount was accordingly taken as the value of the house in the hands of the deceased and treated as exempt under Section 33(l)(n) of the Act. There was no question of allowing any separate deduction of Rs. 55,350. On appeal, the CED(A) upheld the order of the Asstt. CED denying the deduction of the liability of Rs. 55,350 as all the instalments of the house purchased from Avas Avam Vikas Parishad had not been paid. On further appeal, the learned Tribunal has accepted the contention of the accountable person. The Tribunal has held that this amount of Rs. 55,350 represented a liability by the deceased and the amount was liable to be deducted from the value of the estate. The Tribunal also held that this deduction could not be disallowed merely on the ground that it related to an exempted asset as there was no such provision in the ED Act.

(3.) We have heard Sri A.N. Mahajan, learned standing counsel who appears for the Revenue. Sri R.K. Jain has put in appearance on behalf of the respondent- assessee, accountable person.