CONTROLLER OF ESTATE DUTY Vs. K LINGAMURTI

JUDGEMENT

(1.) THE question referred by the Tribunal for the opinion of this Court runs thus : "whether in the facts and circumstances of the case, the amount to be deducted under Sec. 50a of the Estate Duty Act, had been correctly determined by the Tribunal at Rs. 3200/- ?. "

(2.) THE relevant facts appearing from the order of reference may be stated in brief. The deceased K. Buchiraju, who died on 5-8-61 had made two gifts of Rs. 40,000/- each to his two grandsons separately on 21-10-57. The deceased deposited Rs. 6400/- as advance gift tax under Section 18 of the Gift Tax Act. The gift tax payable was determined at Rs. 3200/ -. At the time of assessment he was given credit to the tune of Rupees 640/- which represents 10 per cent of the amount deposited. The total amount available for gift tax was Rs. 7040. The assessee took a refund of Rs. 3840/ -. Section 50a of the Estate Duty Act makes a provision that where tax has already been paid under the Gift Tax Act in respect of gift of any property which is also included in the estate of the donor as property passing under the Estate Duty Act, the estate duty payable shall be reduced by an amount equal to the amount of gift tax paid in respect of such property under the Gift Tax Act The subject-matter of the aforesaid two gifts was taken into consideration for assessment of estate duty. The question for consideration was as to the amount of gift tax to be allowed as a deduction from the estate duty. The Assistant Controller and the Appellate Controller held that the sum deductible was Rs. 2560/- and not Rupees 3200/ -. The Tribunal took the contrary view. It was of opinion that the assessable gift tax was Rs. 3200/- and that amount should be deducted,

(3.) THE question for consideration Is whether Rs. 2560/- or Rs. 3200/- is to be deducted towards gift tax. This necessitates an examination of Section 18 (1) of the Gift Tax Act and Section 50-A of the Estate Duty. Act.