Residential use exemption in estate duty turns on practical readiness for residence, not continuous physical occupation.

For residential property exemptions under estate duty and analogous tax provisions, the requirement that a house be used for residential purposes is to be read pragmatically, not pedantically. Actual physical occupation throughout the year is not essential if the property is kept ready for personal residential use and is not let out or diverted to commercial use. Applying that approach, the Delhi HC held that the house remained in readiness for residence and had not been let out after the relevant date, so the deduction could not be disallowed and the issue was decided in favour of the accountable person.

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Issues: Whether the deduction under section 33(1)(n) of the Estate Duty Act, 1953 was admissible where part of the house property was kept ready for personal residential use and was not let out after a specified date.

Analysis: The expression "house" was construed in its ordinary and contextual sense, and the requirement of use for residential purposes was held to call for a pragmatic and reasonable interpretation rather than a pedantic one. The Court relied on the analogous language of section 5(1)(iv) of the Wealth-tax Act, 1957 and held that actual physical residence throughout the year was not essential. What mattered was whether the property was kept ready for residential use and, in fact, used for residence, and not diverted to rent or commercial use. On the facts, the house was found to have been kept in readiness for use and not let out after the relevant date.

Conclusion: The disallowance of the deduction could not be sustained, and the question was answered against the Revenue and in favour of the accountable person.

Ratio Decidendi: For residential property exemptions under the estate duty and analogous tax provisions, "use for residential purposes" is to be applied pragmatically, and a house kept ready for personal residential use, even if not continuously occupied, satisfies the statutory requirement unless it is let out or put to commercial use.

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