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TMI Blog1982 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, for the purpose of determining the rate of estate duty payable on the property passing on the death of the deceased, aggregation of the share of lineal descendants in terms of section 34(1)(c) of the Estate Duty Act is correct ? " The facts in so far as they are relevant for answering the two questions referred are : The deceased was a member of an HUF consisting of himself and his two sons. On his death the accountable persons filed the return showing the value of the I estate of the deceased, i.e. his share in the properties owned by the HUF, at Rs. 94,835. The Asst. Controller, however, disagreed with this valuation, and valued the entire properties held by the HUF at Rs. 9,26,768 and the 1/3 share of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39(1), that the exemption must be confined only to the deceased's share in the residential house. Section 33(1)(n) reads: "33. Exemptions.-(1) To the extent specified against each of the clauses in this sub-section, no estate duty shall be payable in respect of property of any of the following kinds belonging to the deceased which passes on his death-. ...... (n) one house or part thereof exclusively used by the deceased for his residence, to the extent the principal value thereof does not exceed rupees one lakh if such house is situate in a place with a population exceeding ten thousand, and the full principal value thereof, in any other case. " Several High Courts have taken the uniform view that in the case of a residential house own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as contemplated by s. 34(1)(c). The learned judges merely followed the earlier decision of this court in R. C. No. 30/74, dated 19th October, 1976. We have sent for that decision and have perused it. The paragraph in that judgment, which has indeed been quoted in the aforesaid decision, reads as follows: " So far as this aspect of the case is concerned, we are of the opinion that the amount of Rs. 74,882, being the entire value of the residential house in which the deceased had one-third share, the deceased's 1/3 share will have to be exempted as per the provisions of section 33(1)(n) of the Estate Duty Act. So far as the balance of the value is concerned, it is not in dispute that the two sons of the deceased are the coparceners and they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to s. 34(1)(c) or s. 34(1)(a) in the decision. But this decision in R.C. No. 30/74 was understood as applying to the facts of the case in CED v. Estate of Late Durga Prasad Beharilal [1979] 116 ITR 692 (AP), though in the latter case the question squarely arose with reference to s. 34(1)(c). In view of the fact that the subsequent Bench did not itself Jay down any principle but merely purported to follow an earlier decision, under the impression that that decision covered the facts before them, we are of the opinion that the said decision cannot be understood as an authority for the proposition that the shares of the lineal descendants cannot be aggregated with the shares of the deceased, under s. 34(1)(c), for the purpose of determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of the deceased in that house and not in respect of the whole house in which the surviving coparceners also have interest. Hence, exclusion of the entire value of the house at the stage of valuation under s. 39 is not called for. The principal value of all the properties of the deceased should be first ascertained in accordance with the rules contained in the Act, including s. 39, and then the value of items in respect of which estate duty is not payable under ss. 25, 26, 27, 28, 29, 32, and 33(1)(a) to (p) should be determined. While computing estate duty deduction should be given in respect of the value of these items on which estate duty is not payable. Section 34(1)(a) dealing with aggregation for the purpose of determining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any reference to any exemption under section 33(1)(n) of the Act. " To the same effect are the decisions of the other High Courts: vide T. Sundaresa Mehta v. CED [1981] 127 ITR 107 (Mad), Gunvantlal Keshavlal v. CED [1982] 134 ITR 533 (Guj), Smt. Gunvantibai v. CED [1981] 130 ITR 122 (MP) and CED v. R. S. Gwalre [1981] 130 ITR 261 (MP). The Karnataka High Court reaffirmed the principle of CED v. K. Nataraja [1979] 119 ITR 769 (Kar), in a subsequent decision in CED v. N. Ramachandra Bhat [1980] 123 ITR 841 (Kar). In view of the above uniform authority and the clear language of s. 34(1)(c), we must hold that the Revenue was right in clubbing the values of the share of the two sons (who are undoubtedly lenial descendants of the deceased) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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