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TMI Blog1978 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 48,777 on account of annuity deposits was rightly included in the principal value of the estate of the deceased ? (2) If the answer to the first question is in the affirmative, whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no deduction should be made out of the value of the annuity deposits on account of income-tax payable by the legal heirs of the deceased on the instalments of annuity deposits receivable by them ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the estate duty payable on the estate should not be deducted while determining the principal value of the estate of the deceased ? (4) Whether, on the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n should have been less than Rs. 47,047 in view of the fact that the accountable persons had to pay income-tax on the annuity deposit as and when it was realised after the death of the deceased. The Tribunal negatived both the contentions of the accountable persons. At the hearing of these cases no argument was addressed on the first question. It is clear that the beneficial interest in the sums deposited by the deceased under s. 280G of the I.T. Act, 1961, and the right to recover them did pass on the death of the deceased to his heirs and they, therefore, come within the definition and ambit of the expression "property passing on the death of the deceased " as defined in s. 2(16) of the Act. Question No. (1) has been rightly decided by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation of the annuity deposits at the time of the death of the deceased. The value of the estate of the deceased has to be determined as on the date of the death of the deceased and it is not really the value of the estate in the hands of the accountable persons subsequently. We do not find any substance in this contention. The argument advanced in respect of the third question is that the estate duty payable was a first charge on the estate and, therefore, the principal value as determined under s. 36 of the Act should be reduced by the estate duty. The decision of this court in Smt. V. Pramila v. Controller of Estate Duty [1975] 99 ITR 221 (Kar) has laid down that the estate duty payable in respect of an estate could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We also do not find any distinction between the contention now urged before us and the one which was rejected in the case of Smt. V. Pramila. We, therefore, reject the above contention. The fourth question relates to the amount realised from the LIC. The deceased had insured his life with the LIC and, under the policies, a sum of Rs. 51,278 became payable on the death of the deceased and was realised. The deceased had borrowed some amount on the security of the said policies and, in that connection, he had assigned the policies in question by way of security in favour of the LIC. Under the transaction, the deceased was liable to pay Rs. 28,684 on the date of his death. The Asst. Contr. of E.D. while computing the net principal value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to accept the case that the deceased had paid a fanciful price for the property. It treated the sum of Rs. 1,27,730 paid by the deceased in the year 1966 as representing the fair market price as the deceased was a business man who knew the market value of properties in Bangalore. Having rejected the said case of the accountable persons, the Tribunal valued the property at Rs. 1,28,000 (by rounding off the actual price paid by the deceased) as on the date of the death of the deceased, i.e., February 9, 1969, nearly 3 years after the purchase. It is no doubt, true that one of the modes of the computation of the value of a property is the capitalisation of the rental receipt in respect of it. This principle has to be adopted when there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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