1986 (10) TMI 62 - AT - Income Tax

Tribunal grants exemption for damaged residential house under Estate Duty Act

The Tribunal allowed the appeal, ruling in favor of the appellant, and granted the exemption for the residential house in Morvi under section 33(1)(n) of ... Exemption, Residential House Issues:Interpretation of Section 33(1)(n) of the Estate Duty Act regarding exemption for a residential house exclusively used by the deceased for his residence.Analysis:The case involved an appeal by the accountable person, the legal representative of a deceased individual, regarding the denial of exemption claimed under section 33(1)(n) of the Estate Duty Act for a residential house in Morvi, Gujarat. The deceased had shifted from Gujarat to Kanpur, where he resided in a rental accommodation. The appellant argued that the deceased maintained the house in Morvi for his exclusive residence, as evidenced by the will and his frequent visits. The Departmental Representative contended that the deceased was a resident of Kanpur at the time of his death and that the Morvi house was damaged and unsafe for habitation. The appellant submitted additional evidence before the Appellate Tribunal, which had not been presented before the lower authorities. However, the Tribunal held that such papers should not be considered as evidence without prior permission.The Tribunal analyzed the requirements of section 33(1)(n) of the Estate Duty Act, which allows a deduction for a house exclusively used by the deceased for his residence. It noted that the deceased owned a residential house in Morvi, as confirmed by the will, and that there was no evidence to suggest it was rented out or used by someone else. The Tribunal emphasized that the deceased did not need to be present at all times in the house for it to qualify as exclusively used for residence. The mere existence of another residence in Kanpur did not disqualify the appellant from claiming exemption for the Morvi house.Regarding the damage to the Morvi house due to floods, the Tribunal acknowledged the approved valuer's report indicating structural damage. However, it rejected the argument that serious cracks rendered the house uninhabitable, emphasizing that even if unsafe, the house retained its character as a residential property. Consequently, the Tribunal held that the appellant was entitled to the exemption under section 33(1)(n) for the residential house in Morvi, overturning the decisions of the lower authorities.In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellant and granting the exemption for the residential house in Morvi under section 33(1)(n) of the Estate Duty Act.