Gift-tax paid on estate property is deductible from estate duty under section 50A, subject to proof of payment.

Where a regular estate duty demand may overlap with an amount already covered by a provisional assessment, the record required verification to determine whether the later demand was inclusive or additional, and that factual question was left to the Estate Duty Officer after notice to the accountable person. Gift-tax paid on property included in the estate was deductible from estate duty under section 50A of the Estate Duty Act, but only if payment was proved before the authority below. The matter therefore turned on factual verification of the demand and proof of gift-tax payment, with deduction recognised in principle where that payment is established.

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Issues: (i) whether the amount raised in the regular estate duty assessment already included the sum said to have been determined in the provisional assessment; (ii) whether gift-tax paid on property included in the estate was deductible from estate duty.

Issue (i): whether the amount raised in the regular estate duty assessment already included the sum said to have been determined in the provisional assessment.

Analysis: The record did not clearly disclose whether the regular demand was inclusive of the amount earlier held payable on provisional assessment or whether it was an additional demand. That factual question required verification by the Estate Duty Officer after notice to the accountable person.

Conclusion: The issue was left for determination by the Estate Duty Officer.

Issue (ii): whether gift-tax paid on property included in the estate was deductible from estate duty.

Analysis: The Court held that if the accountable person had in fact paid gift-tax on the property whose value was included in the estate, the amount was deductible from the estate duty payable. The entitlement flowed from section 50A of the Estate Duty Act, but the factual factum of payment still had to be examined by the authority below.

Conclusion: The accountable person was entitled to deduction of the gift-tax amount, subject to proof of payment before the Estate Duty Officer.

Final Conclusion: The matter was sent back for factual verification and consequential determination, while recognising the legal availability of deduction under section 50A where gift-tax payment is established.

Ratio Decidendi: Where gift-tax has been paid on property whose value is included in the estate, the amount is deductible from estate duty under section 50A of the Estate Duty Act, subject to proof of such payment.

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