CONTROLLER OF ESTATE DUTY Vs. J N ELIAS

JUDGEMENT

(1.) This is a reference under Section 64(3) of the Estate Duty Act, 1953. One Mrs. Rachel N. B. Elias died on 30th June, 1969, and Shri M. N. Dutta, executor of her estate, filed an account of the estate and the Assistant Controller completed the assessment on May 24, 1974, determining the net principal value at Rs. 12,55,213. In computing the net principal value, the Assistant Controller, inter alia, valued the life interest in the property at 69, Park Street, Calcutta, at Rs. 5,62,000 as against the value of Rs. 3,94,000 returned by the accountable person based on the valuation of Ms. Talbot & Co., approved valuers.

(2.) On appeal before the Appellate Controller, he did not accept the valuation shown by the accountable person nor the valuation determined by the Assistant Controller. On the other hand, he held taking due note of the order of the Tribunal in the wealth-tax assessment fixing the rental of the ground floor at Rs. 950 per month as reasonable. He has computed the net annual rental income from the property at Rs. 36,800 after allowing 1/3rd of gross rent for outgoing and applying the multiplying factor at 14 instead of 12.5 adopted by the Tribunal for wealth-tax purposes. Thus, he determined the value of the property at Rs. 5,15,000.

(3.) On second appeal, the Tribunal accepted the estimation of ground floor rent of RS. 950 per month as reasonable. It also held that collection charges and repairs as laid down in the Income-tax Act must be taken into account for arriving at the net income from the property. As regards capitalisation, the Tribunal followed the multiplying factor of 12'5 which was adopted in the case of Sri Elias. The Tribunal also pointed out that the deceased had only life interest in the property, whereas Sri Elias had 1/4th share in the house property and, therefore, the Appellate Controller was wrong in not following its decision in the case of Sri Elias. Finally, the Tribunal determined the valuation of the property at Rs. 4,06,962 which was worked out by the approved valuer of the deceased.