1983 (7) TMI 85 - AT - Income Tax

Tribunal excludes ex gratia payment, reverts Vespa Scooter valuation, directs exemption grant.

The Tribunal ruled in favor of the accountable person, excluding the ex gratia payment from the dutiable estate, reverting the Vespa Scooter valuation to ... Property Passing On Death Issues:1. Whether the ex gratia payment of Rs. 1 lakh received by specified family members of the deceased is subject to estate duty.2. Valuation of an old Vespa Scooter for estate duty purposes.3. Exemption under section 33(1)(h) of the Estate Duty Act, 1953.Analysis:Issue 1: Ex Gratia Payment and Estate DutyThe accountable person contested the inclusion of the Rs. 1 lakh ex gratia payment in the estate for duty assessment. The payment was received by specified family members of the deceased who died in an air-crash while serving in the Air Force. The revenue authorities relied on the case of CED v. A. T. Sahani to levy estate duty on the payment. However, the accountable person argued that the payment was ex gratia and payable to specified family members, citing precedents such as CED v. Kasturi Lal Jain and Smt. Lakshmisagar Reddy v. CED to support their claim. The Tribunal noted that the payment was made as per a government order, clearly stating it was ex gratia and payable to specified family members surviving the deceased. Considering the legal principles and precedents, the Tribunal held that the ex gratia payment did not form part of the dutiable estate and ordered its exclusion.Issue 2: Valuation of Vespa ScooterThe Assistant Controller had enhanced the valuation of an old Vespa Scooter from Rs. 1,000 to Rs. 2,500 for estate duty assessment, which was confirmed by the Controller. The accountable person argued that given the circumstances of the head of the house's demise, the scooter may not fetch even the initial valuation of Rs. 1,000. The Tribunal found the reasoning for the enhanced valuation insufficient, as neither the condition nor the model of the scooter was provided. Considering the lack of adequate valuation details, the Tribunal ordered the valuation to be reverted to Rs. 1,000.Issue 3: Exemption under Section 33(1)(h)Regarding the exemption under section 33(1)(h) of the Act, the accountable person requested a direction for allowance, as per the Controller's observation that the deduction had already been granted. The Tribunal directed the Assistant Controller to allow the deduction if not already done, based on the assessment record.In conclusion, the Tribunal allowed the appeal, excluding the ex gratia payment from the dutiable estate, reverting the Vespa Scooter valuation to Rs. 1,000, and directing the Assistant Controller to grant the exemption under section 33(1)(h) if not already allowed.