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Issues:
Interpretation of s. 33(1)(n) and s. 34(1)(a) of the E.D. Act, 1953 regarding exemption of a residential house from estate duty and inclusion of share of lineal descendants for rate purposes. Analysis: The case involved a reference under s. 64(1) of the E.D. Act, 1953, regarding the exemption of a residential house from estate duty and the inclusion of the share of lineal descendants for rate purposes. The deceased, as the karta of his HUF, owned a residential house. The Assistant Controller estimated the value of the house and held that the share of the deceased and his wife was exempt while the share of lineal descendants was includible for rate purposes. The Tribunal, however, held that the entire house occupied by the deceased was exempt under s. 33(1)(n) and s. 34(1)(a) of the Act, excluding it from estate duty and rate purposes. On appeal, the Controller of Estate Duty challenged the Tribunal's decision, arguing that only the deceased's share in the residential house should be exempt, and the share of lineal descendants should be included for rate purposes. The Court referred to a Division Bench decision emphasizing that only the deceased's share in the property passes on his death for exemption purposes. The Court highlighted the importance of the phrase "which passes on his death" in s. 33(1) and the valuation principles under s. 39(1) for joint family properties. The Court concluded that the Tribunal erred in solely relying on s. 33(1)(n) without considering the principal value of the deceased's share in the joint family property. Therefore, the Court held that the Tribunal was not justified in exempting the entire house from estate duty and excluding the share of lineal descendants for rate purposes. The Court ruled that the half share of the lineal descendants should be included for rate purposes under s. 34(1)(a) and (c) of the E.D. Act, 1953. No costs were awarded as neither party appeared before the Court.
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