Estate duty rate computation: coparcenary share of lineal descendants is aggregated, while residential-house exemption stays confined to the deceased's share.

Section 33(1)(n) of the Estate Duty Act, 1953 exempts only one house or part thereof used by the deceased for residence, and the exemption is limited to property belonging to the deceased and passing on death. Section 34(1)(c) separately requires aggregation of the interests of all lineal descendants in joint family or coparcenary property for determining the rate of estate duty. The deceased's residential-house exemption does not override this aggregation rule, so the lineal descendants' share in coparcenary house property is included for rate purposes even though that share does not pass on the deceased's death.

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Issues: Whether, for purposes of rate of estate duty under section 34(1)(c) of the Estate Duty Act, 1953, the share of the lineal descendants in coparcenary house property was includible in the principal value of the estate, and whether the exemption under section 33(1)(n) extended beyond the deceased's own share.

Analysis: Section 33(1)(n) grants exemption only in respect of one house or part thereof exclusively used by the deceased for residence, and the exemption is confined to property belonging to the deceased and passing on his death. Section 34(1)(c), on the other hand, specifically requires aggregation of the interests of all lineal descendants in joint family property for determining the rate of estate duty. The Court followed the view that the deceased's residential-house exemption cannot override the separate statutory mandate of aggregation under section 34(1)(c). The share of the lineal descendants in the coparcenary property does not pass on the deceased's death, but is nevertheless includible for rate purposes under the express language of section 34(1)(c).

Conclusion: The share of the lineal descendants in the coparcenary house property was includible in the principal value of the estate for rate purposes, and the Tribunal's contrary view was held to be incorrect.

Final Conclusion: The reference was answered against the assessee and in favour of the Revenue, confirming aggregation of the lineal descendants' interest for rate purposes while confining the residential-house exemption to the deceased's own share.

Ratio Decidendi: Exemption under section 33(1)(n) of the Estate Duty Act, 1953 is limited to the deceased's own interest in the residential house, while section 34(1)(c) mandates aggregation of the lineal descendants' interest in coparcenary property for determining the rate of estate duty.

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