Strict construction of residential exemption limits estate duty relief to the proportionate value of the part used for residence.

Section 33(1)(n) of the Estate Duty Act was construed as an exemption for a house, or part of a house, exclusively used by the deceased for residence, and not as an unrestricted monetary ceiling for the whole property. Because exemption provisions are to be strictly construed, the relief cannot be extended to value beyond the portion actually used as a residence merely because only part of the house was occupied. The statutory words "such house" were treated as limiting the benefit to the residential portion, so where only part of the property was used for residence, the exemption applies only on a proportionate basis.

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Issues: Whether the exemption under section 33(1)(n) of the Estate Duty Act for one house or part thereof exclusively used by the deceased for residence is confined to the proportionate value of the portion actually used for residence, or extends to the whole of the monetary ceiling of rupees one lakh.

Analysis: The provision was construed as applying to the house as a residential unit and not as conferring an unrestricted ceiling for a partly occupied property. Reading the clause to cover the entire value of a house merely because only a portion was occupied would produce an anomalous result and would disregard the words "such house". As an exemption provision, it had to be strictly construed, and the drafting inelegance did not justify enlarging the relief beyond the portion used for residence. Where only part of the house was used by the deceased for residence, the exemption was held to be available only with reference to that proportionate part.

Conclusion: The relief under section 33(1)(n) of the Estate Duty Act is restricted to the value of the portion of the property used by the deceased for residence, and not to the whole rupee one lakh ceiling; the question was answered in favour of the Revenue.

Ratio Decidendi: An exemption for a house or part thereof exclusively used as a residence is to be strictly construed and, where only a part of the house is so used, the statutory relief extends only to the proportionate value of that residential portion.

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