Estate duty deduction for flat purchase liability allowed despite exemption of the flat itself

Liabilities incurred for purchasing an exempt residential flat remained deductible in computing the principal value of the estate because section 44 of the Estate Duty Act allows all deceased liabilities unless specifically barred. The flat's exemption under section 33(1)(n) did not prevent deduction of the related purchase liability, as that liability was a separate item and had not already been deducted from the flat's value. Reliance on section 2(m)(ii) of the Wealth-tax Act was rejected because a sister statute cannot impose an additional restriction not found in the principal Act. The liability was therefore allowable as a deduction.

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Issues: Whether liabilities raised for purchase of a residential flat exempt under section 33(1)(n) of the Estate Duty Act, 1953 could be deducted again while computing the principal value of the estate, or whether such deduction was barred because the flat was exempt and the debt was connected with it.

Analysis: The flat was treated as exempt from estate duty under section 33(1)(n), but the liability incurred for its purchase was viewed as a separate question for computation of the principal value of the estate. Under section 44 of the Estate Duty Act, 1953, all liabilities of the deceased are deductible unless specifically barred by the statutory exceptions. The liability in question did not fall within those exceptions, and it had not already been deducted from the value of the flat for estate-duty purposes. The reference to section 2(m)(ii) of the Wealth-tax Act did not assist the revenue, because a sister enactment cannot be used to add a further restriction where the principal statute is clear.

Conclusion: The liability was allowable as a deduction in computing the principal value of the estate, and the revenue's objection failed.

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