AI Drafter 
TaxTMI 
TaxTMI 
2004 (2) TMI 23
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....is right in law and on facts in holding that as regards the deduction of the debt of Rs. 3,14,345 there was no encumbrance or charge on the house property in question in respect of this debt and consequently deduction in respect of this debt would be allowable from the aggregate value of the property passing on death and not only from house property as contended by the Department?" The facts leading to this reference, as found in the statement of case drawn by the Tribunal, are as under: The name of the deceased was Shri Vallabhji Ratanshi. The date of his death was October 22, 1984. The deceased had constructed a house and that house was one of the properties which passed on his death. The deceased had withdrawn Rs. 3,14,345 from the....
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....on went in appeal before the Tribunal. The Tribunal observed that one of the two grounds raised by the accountable person pertained to the value to be adopted in respect of the house property. The Tribunal relied on the decision of the Bombay High Court in Jehangir Mahomedali Chagla v. Subrahmanian (M.V.), Addl. First ACED [1985] 155 ITR 637 in which the Bombay High Court had held that the residential property of the deceased should be valued in accordance with rule 1BB of the Wealth-tax Rules, 1957, in estate duty proceedings. The Tribunal noted that in the wealth-tax proceedings this very property had been valued in accordance with rule 1BB and that there was no reason why the value of the same house in estate duty proceedings should be m....
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....e person. Mr. Desai has further submitted that rule 14 was not considered by the Bombay High Court while relying on the decision in Jehangir Mahomedali Chagla v. Subrahmanian (M.V.), Addl. First ACED [1985] 155 ITR 637. We have carefully considered the submission of Mr. Desai. The submission is, of course, prima facie quite attractive, but on closer scrutiny the same is not required to be accepted. Section 36 of the Act provides how the principal value of any property is to be determined. Sub-section (1) empowers the Controller to estimate the principal value of any property which in the opinion of the Controller, would fetch the price if sold in the open market at the time of the deceased's death. Sub-section (3) of section 36 reads as ....
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.... Act. Section 41 reads as under: "41. Valuation to be made by the Controller.-Subject to the provisions of this Act, the value of any property for the purpose of estate duty shall be ascertained by the Controller in such manner and by such means as may be prescribed and if he authorizes a person to inspect any property and to report the value thereof for the purposes of this Act, that person may enter upon the property and inspect it at such reasonable times as may be prescribed." Rule 14 is to be found in Part VI with the title "valuation and inspection of property (section 41)". Sub-rule (1) of rule 14 reads as under: "14. Valuation. -(1) The Controller may accept the valuation as shown in the account delivered by the accountable....
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....ceased (which is to be specified by the accountable person at his or her option) which is assessed to wealth-tax on the valuation date immediately preceding the date of death of the owner of that house. In the instant case, the date of death was October 22, 1984, and, therefore, the provisions of sub-section (3) of section 36 were attracted. There is no dispute about the fact that the property in question was valued under the Wealth-tax Act at Rs. 51,188 on the last valuation date immediately preceding the date of death of Vallabhji Ratanshi and, therefore, the Tribunal rightly directed the Assistant Controller of Estate Duty to make the valuation of the house property in accordance with rule 1BB of the Wealth-tax Rules. The decision of ....