9911796707
|
Home
Issues:
Whether estate duty payable is deductible in computing the principal value of the estate under the E.D. Act, 1953. Analysis: The judgment delivered by the High Court of Madras involved a reference from the Income-tax Appellate Tribunal regarding the deductibility of estate duty in the computation of the principal value of an estate under the E.D. Act, 1953. The accountable person, who was the adopted son and residuary legatee of the deceased, argued that the estate duty should be deducted as it became a charge on the property immediately upon the death of the deceased. The Tribunal, however, rejected this plea based on previous court decisions. The accountable person's counsel referred to a decision by the Mysore High Court where estate duty was allowed as a deduction in a similar context. The revenue, on the other hand, argued that the estate duty cannot be considered an incumbrance created by the deceased and therefore should not be deductible. The revenue's argument was supported by various court decisions, including a judgment by the Madras High Court and decisions from Karnataka, Andhra Pradesh, and Gujarat High Courts. These decisions emphasized that estate duty is not a debt or incumbrance within the meaning of the Act and is a personal liability of the accountable person, not the estate itself. The Madras High Court, in a previous case, held that estate duty, though legally payable out of the estate, is not a debt due from the deceased and hence should not be deducted in calculating the market value for court fee purposes. The High Court of Madras, concurring with the Gujarat High Court's view, held that estate duty payable on the deceased's estate is not deductible in the hands of the accountable person. Therefore, the judgment answered the reference in the affirmative, against the accountable person, and in favor of the revenue. The revenue was awarded costs, including counsel's fee.
|
