Narrow construction of estate duty relief leaves testamentary widow's property taxable, while residential exemption remains available.

Section 32 of the Estate Duty Act was construed narrowly as applying only where a Hindu widow takes her husband's property by intestate devolution and, on her death, the property reverts to the husband's reversioners. Property received under the husband's will or another testamentary arrangement did not fall within that provision, so its value remained includible in the estate duty assessment. The residential exemption under section 33(1)(n) was nevertheless available because the deceased had resided in the property; her limited interest did not prevent the property from qualifying for that relief.

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Issues: (i) Whether section 32 of the Estate Duty Act applied where the deceased widow had received the property under her husband's will; (ii) Whether exemption of Rs. 1 lakh was available under section 33(1)(n) of the Estate Duty Act because the deceased had resided in the property.

Issue (i): Whether section 32 of the Estate Duty Act applied where the deceased widow had received the property under her husband's will.

Analysis: Section 32 was held to be intended to cover only the case where a Hindu widow succeeds to her husband's property by intestate devolution and, on her death within seven years, the property reverts to the husband's reversioners. The expression used in the section was contrasted with the earlier draft and with the concept of reversioners, and the provision was construed in light of its object of avoiding double duty on the same property in a limited class of Hindu succession cases. A testamentary life estate in favour of the widow did not answer that description, and the restriction to Hindu cases also supported a narrow construction.

Conclusion: Section 32 did not apply, and the value of the property was includible in the estate duty assessment.

Issue (ii): Whether exemption of Rs. 1 lakh was available under section 33(1)(n) of the Estate Duty Act because the deceased had resided in the property.

Analysis: The deceased was found to have been residing in the property. Even though her interest was limited, the property was treated as belonging to her for purposes of the exemption, following the reasoning that residence in such property attracted the statutory relief.

Conclusion: The exemption of Rs. 1 lakh was allowed under section 33(1)(n).

Final Conclusion: The assessment was altered by bringing the property into charge, while granting the residential exemption, and the Department's appeal succeeded only to that extent.

Ratio Decidendi: Section 32 of the Estate Duty Act applies only to intestate devolution to a Hindu widow followed by devolution to the husband's reversioners, and not to property taken by her under her husband's will or other testamentary arrangement.

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