Aggregation for estate duty rate does not enlarge principal value for rebate under the charging scheme.

For rebate under the Estate Duty Act, 1953, the principal value of the estate does not include the value of a lineal descendant's interest aggregated under section 34(1)(c) for rate purposes. Section 5 imposes the charge only on the estate passing on death, while aggregation under section 34(1)(c) operates merely to fix the rate under section 35 and does not enlarge the estate's principal value. The rebate under section 35(3) is therefore computed on the deceased's estate alone, not on the aggregated value. The issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether, for the purpose of rebate under section 35(3) of the Estate Duty Act, 1953, the principal value of the estate had to include the value of the lineal descendant's interest aggregated under section 34(1)(c) for rate purposes.

Analysis: Section 5 is the charging provision and fastens the levy only on the estate passing on death. Section 34(1)(c) provides for aggregation merely to determine the rate of duty under section 35 and does not enlarge the value of the estate on which the charge is imposed. The principal value relevant to the rebate, therefore, remains the estate left by the deceased and not the aggregated value of the lineal descendant's interest.

Conclusion: The aggregated value under section 34(1)(c) was not to be included in the principal value of the estate for section 35(3); the question was answered in favour of the assessee and against the Revenue.

Ratio Decidendi: Aggregation of property for fixing the rate of estate duty does not form part of the principal value of the estate for determining rebate entitlement under the charging scheme of the Estate Duty Act, 1953.

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