Life interest in residential property can qualify for estate duty exemption under a broad reading of ownership.

The Estate Duty Act was construed broadly on whether residential property subject to a life interest could qualify for exemption under section 33(1)(n). The High Court read "property" in section 2(15) and the word "belonging" in the exemption provision as covering interests less than absolute ownership, so a deceased's subsisting life interest in the house was sufficient for the claim. Applying that interpretation and relying on comparable precedent, the exemption for the residential property was upheld.

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Issues: Whether exemption under section 33(1)(n) of the Estate Duty Act, 1953, was available in respect of the portion of the house used by the deceased for her residence, where she held only a life interest and the remainder was bequeathed to her sons.

Analysis: Section 2(15) of the Estate Duty Act, 1953 defines property to include any interest in property, and the expression "belonging" in section 33(1)(n) is not confined to absolute ownership. A house held under a life interest may therefore still be treated as property belonging to the deceased for the purpose of the residential-house exemption, so long as the deceased exclusively used the relevant portion for residence. On the facts, the deceased resided in the ground floor of the premises and the bequest gave her a subsisting qualifying interest during her lifetime.

Conclusion: The exemption under section 33(1)(n) was rightly allowed in respect of the portion used by the deceased for her residence; the answer was in the affirmative and in favour of the assessee.

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