2001 (3) TMI 72 - HC - Income Tax

Court allows deduction under Estate Duty Act for house ready for personal use.

BN. Chakravarty Versus Controller of Estate Duty

The court ruled in favor of the accountable person, allowing the deduction claimed under section 33(1)(n) of the Estate Duty Act, 1953. The court held ... Estate Duty, Exemption, House Property Issues:Non-allowance of deduction under section 33(1)(n) of the Estate Duty Act, 1953.Analysis:The issue in this case revolves around the non-allowance of a deduction of Rs. 1 lakh claimed by the accountable person from the value of the deceased's estate under section 33(1)(n) of the Estate Duty Act, 1953. The deceased, who was a Governor of Haryana, passed away, and the claim for exemption on a house property in New Delhi was disputed. The Assistant Controller of Estate Duty rejected the claim for self-occupancy, stating that the deceased or his family never resided in the house. The Appellate Controller upheld this decision, emphasizing the need for the house to be in self-occupancy, not just in possession of the deceased. The Tribunal also ruled against the accountable person, stating that merely keeping the house ready for personal use did not meet the legal requirements.The accountable person argued that a pragmatic view should have been adopted, highlighting that the deceased's rear portion of the house was exclusively used for residence. The dispute centered on the interpretation of the term 'house' and its use for residential purposes. The court referred to the common parlance meaning of a house as a building for human habitation. It emphasized that the requirement of use for residential purposes should be construed pragmatically, allowing for flexibility in its interpretation. The court cited previous judgments to support the view that the house need not be used continuously or exclusively by the owner to qualify for the deduction.Ultimately, the court disagreed with the Tribunal's interpretation and ruled in favor of the accountable person. It held that the house being kept ready for personal use and not let out after a certain date was sufficient to meet the criteria for the deduction under section 33(1)(n) of the Act. The judgment emphasized the importance of readiness for use and actual use for residence, rather than physical occupancy. The court's decision favored the accountable person and rejected the Revenue's stance, concluding the reference in the accountable person's favor.