Crystallised tax liability deductible against estate duty even if assessment is completed after death.

Gift-tax liability arising from gifts made during the deceased's lifetime was treated as a deductible debt in estate duty computation under section 44 of the Estate Duty Act, because the liability had crystallised in substance on the relevant date even though the assessment order was completed later. The principal value of the estate was therefore required to reflect liabilities that had accrued against the deceased. Applying the same principle used in wealth-tax matters, the text states that the liability was allowable as a deduction against the estate and the question was answered in favour of the accountable person.

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Issues: Whether gift-tax liability payable on assessments completed after the deceased's death is deductible as a debt against the estate under section 44 of the Estate Duty Act, 1953.

Analysis: The liability to gift-tax arose from gifts made during the deceased's lifetime and had crystallised in substance on the relevant date, although the assessment orders were completed later. The same principle applied in wealth-tax matters was treated as governing estate duty computation as well, because the principal value of the estate must reflect liabilities that had accrued against the deceased.

Conclusion: The gift-tax liability was allowable as a deductible debt against the estate, and the question was answered in the affirmative in favour of the accountable person.

Ratio Decidendi: A tax liability that has crystallised on the relevant date is deductible in computing the estate, even if the assessment determining the exact amount is finalised thereafter.

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