Estate duty valuation of closing stock must reflect market value on the date of death

In estate duty proceedings, closing stock must be valued at its market value as on the date of death, which is the relevant valuation date under the Estate Duty Act. Applying that principle, the Tribunal's enhancement of the firm's closing stock to the retail market price obtainable on that date was upheld as correct on the facts.

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Issues: Whether, for estate duty purposes, the closing stock of the firm was liable to be valued at the market price obtainable in retail sales as on the date of death.

Analysis: The question arose in proceedings under section 64(1) of the Estate Duty Act, 1953, where the Tribunal had proceeded on the basis that the assets of the deceased had to be valued at the current prevailing price on the relevant valuation date, namely the date of death. The Court followed its earlier decision on an identical issue and held that valuation of closing stock in estate duty proceedings must be made with reference to the date of death, and that the enhancement to market value was justified on the facts.

Conclusion: The answer was rendered in the affirmative, holding that the Tribunal was correct in enhancing the value of the closing stock to the market price obtainable in retail sales.

Ratio Decidendi: In estate duty proceedings, closing stock is to be valued at its market value as on the date of death, which is the relevant valuation date for determining the estate.

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