Estate duty exemption for customary gifts depends on proof of normal expenditure; accountable person's duty payment was not deductible.

Exemption for gifts under the Estate Duty Act depends on proof that the transfers formed part of the deceased's normal expenditure; where the Tribunal found no evidence of festive occasion or established pattern of such gifts, the exemption was unavailable. Estate duty payable by the accountable person was treated as not being an admissible deduction in computing the principal value of the estate, following the court's earlier precedent on the point.

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Issues: (i) Whether gifts to the extent of Rs. 10,000 were excludible under section 9(2)(b) of the Estate Duty Act as part of the deceased's normal expenditure. (ii) Whether estate duty payable by the accountable person is an admissible deduction while computing the principal value of the estate.

Issue (i): Whether gifts to the extent of Rs. 10,000 were excludible under section 9(2)(b) of the Estate Duty Act as part of the deceased's normal expenditure.

Analysis: Exemption under section 9(2)(b) depends on proof that the gifts formed part of the deceased's normal expenditure. The finding of fact recorded by the Tribunal was that none of the gifts was made on Makar Sankranti or any established festive occasion, and there was no evidence that the gifts were part of the deceased's normal expenditure. That foundational factual basis was not shown to be perverse or otherwise open to challenge.

Conclusion: The question was answered in the affirmative, in favour of the Revenue and against the assessee.

Issue (ii): Whether estate duty payable by the accountable person is an admissible deduction while computing the principal value of the estate.

Analysis: The point was treated as covered by the earlier decision of the Court in Shantaben Narottamdas v. CED, and the same view was applied without fresh departure from that settled position.

Conclusion: The question was answered in the negative, in favour of the Revenue and against the assessee.

Final Conclusion: The reference was answered entirely against the assessee, with both referred questions decided in favour of the Revenue.

Ratio Decidendi: A claim for exemption under section 9(2)(b) of the Estate Duty Act succeeds only when the accountable person proves the factual foundation that the gifts were part of the deceased's normal expenditure; absent such proof, the exemption is unavailable.

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