Accrued right to share of profits forms part of the estate for estate duty, even if quantified after death

A deceased employee's accrued right to receive a share of profits was treated as property for estate duty purposes, even though the exact amount was computed only after the accounting year ended. The decisive distinction was between accrual of the entitlement and later quantification of the sum. Because the right had already vested in the deceased before death, it formed part of the estate under the Estate Duty Act. The later calculation of the monetary figure did not exclude it from estate duty merely because the amount was ascertained after death.

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Issues: Whether the sum of Rs. 6,75,244 representing the deceased employee's share of profits was includible in the estate for estate duty purposes.

Analysis: The deceased had an enforceable right, arising from his employment, to receive the share of profits from month to month, though the exact amount could be computed only after the company's accounting year ended. The distinction between accrual of the right and subsequent ascertainment of the amount was material. Under the Estate Duty Act, the concept of property and property passing on death is wide enough to include a right which had accrued to the deceased and which formed part of his estate, even if the monetary figure was determined later. Immediate quantification was not essential, and the amount was not excluded merely because the computation took place after death.

Conclusion: The sum was includible in the estate of the deceased for estate duty purposes, and the answer was in favour of the Revenue.

Ratio Decidendi: A right to receive remuneration or a share of profits that has accrued to the deceased before death constitutes property of the deceased for estate duty purposes, even if the amount is quantified only later.

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