Estate duty valuation follows prior-year wealth-tax values; self-created family obligation for marriage settlement is not deductible.

The valuation of the flat and vacant site had to follow the wealth-tax value for the year immediately preceding death, and the accountable person's figures were accepted because the administrative instruction governed the valuation exercise on the facts. The amount set apart for the daughter's marriage was not deductible as a charge reducing the principal value of the estate, because a charge under section 100 of the Transfer of Property Act does not create an interest in property and the arrangement was a self-created encumbrance arising from a personal obligation. As it was not consideration in money or money's worth under the Estate Duty Act, it could not be allowed indirectly through estate valuation.

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Issues: (i) whether the value of the flat and vacant site had to be adopted in accordance with the wealth-tax valuation for the year immediately preceding death; (ii) whether the sum set apart for the daughter's marriage could be treated as a deductible charge or as a reduction in the principal value of the estate.

Issue (i): whether the value of the flat and vacant site had to be adopted in accordance with the wealth-tax valuation for the year immediately preceding death.

Analysis: The applicable administrative instruction required the Assistant Controller to adopt the wealth-tax value for the year immediately preceding death. The accountable person had shown the values in line with the wealth-tax assessment, while the authorities below had enhanced them. The instruction governed the valuation exercise on the facts presented.

Conclusion: The valuation adopted by the accountable person was directed to be accepted.

Issue (ii): whether the sum set apart for the daughter's marriage could be treated as a deductible charge or as a reduction in the principal value of the estate.

Analysis: A charge can be created without writing, but a charge under Section 100 of the Transfer of Property Act, 1882 does not create an interest in the immovable property; it is only a security for payment out of specified property. Even if the arrangement created a charge, it did not diminish the deceased's full ownership so as to reduce the estate passing on death. The arrangement was also a self-created encumbrance arising from a personal obligation, and the expenditure for marriage did not amount to consideration in money or money's worth within Section 44 of the Estate Duty Act, 1953. A claim barred directly under that provision could not be allowed indirectly by reducing the principal value of the estate.

Conclusion: The deduction claim was rejected and the amount could not reduce the principal value of the estate.

Final Conclusion: The appeal succeeded only on the valuation issue and failed on the claimed deduction, leaving the estate-duty computation altered in part but not wholly in favour of the accountable person.

Ratio Decidendi: A charge created by a deceased person for a personal family obligation, even if valid without writing, does not by itself create an interest in property or a deductible reduction in the principal value of the estate unless it is created for full consideration in money or money's worth.

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