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Issues: Dispute over estate value and estate duty liability based on valuation report; Alleged failure to follow Central Board of Direct Taxes instruction No. 1758 in estate duty assessment.
Analysis: - The judgment concerns a dispute arising from the estate left by a deceased individual, focusing on the value of the estate and the estate duty liability of the legal heirs. - The petitioners contended that the estate duty should be based on the value they returned, while the respondents assessed the duty using a valuation report valuing the property at different amounts. - The petitioners argued that the assessment order ignored Circular No. 1758 issued by the Central Board of Direct Taxes, which provided specific instructions for estate duty assessment. - Circular No. 1758 outlined that for estates with a principal value not exceeding Rs. 7.5 lakhs, assessments should be completed under section 58(1) of the Estate Duty Act. It also allowed for assessments under section 58(3) if notices were issued under section 58(2), with certain conditions for deviation from these instructions. - The Assessing Officer in this case did not exercise the discretion provided in the circular and instead relied on the valuation report, contrary to the instructions mandating acceptance of the returned valuation for estates below Rs. 7.5 lakhs. - The judgment emphasized that the Assessing Officer's misinterpretation of the circular and reliance on the valuation report went against the spirit of the instructions, rendering the assessment order invalid. - Consequently, the court allowed the petition, set aside the impugned order levying estate duty based on the valuation report, and directed the respondents to assess the duty based on the valuation returned by the accountable person. - The judgment clarified that if estate duty was already paid based on the valuation report, no further payment would be required. - No costs were awarded, and all parties were instructed to act on a signed copy of the order. This detailed analysis outlines the key points of the judgment, including the dispute over estate valuation, the failure to adhere to the Central Board of Direct Taxes instruction, and the court's decision to set aside the assessment order and direct a reassessment based on the returned valuation.
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