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TMI Blog1986 (5) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... he case and referred for the decision of this court the following question of law : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction of Rs. 1,27,747 towards excise duty and penalty '? " The material facts are these. The deceased, Narayandas, had 75 per cent. share in the partnership firm, Punjab Soap Works, Jabalpur, in additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has come up for decision by us. It may be stated at the outset that it is common ground that the appeal filed by the firm to assail the demand of excise duty and penalty which was then pending has since succeeded and this entire liability has been quashed. The result is that the liability of the deceased which was calculated at the sum of Rs. 1,27,747 did not survive and admittedly no such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, allowance shall be made for funeral expenses and for debts and encumbrances. It is obvious that unless the amount of which deduction is claimed as a debt of the deceased is payable by him, no such deduction can be given. There is no dispute that no such payment was made by the deceased in the present case and such demand made from the firm of which the deceased was a partner was challenged in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty which passes on the death of such person which means the property which ultimately constitutes the estate of the deceased taking into account also the debts and encumbrances which result in reduction of the estate to that extent. In a case like the present where the deceased was admittedly not required to make the payment nor is such a payment required to be made out of his estate after his de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d we prefer to base our decision on this common sense view contrary to which nothing has been shown from the statute. Consequently, the reference is answered in favour of the Controller and against the accountable person as under: " The Tribunal was not justified in allowing deduction of Rs. 1,27,747 as a debt under section 44 of the Estate Duty Act, 1953. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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