1989 (6) TMI 5

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....howing the total estate at Rs. 5,15,678. During the assessment proceedings, the accountable person had claimed deduction of estate duty liability from the total estate for determining the estate duty payable. The Assistant Controller of Estate Duty disallowed the claim. On appeal, the Appellate Controller of Estate Duty allowed the claim of Rs. 90,186.50. However, the Appellate Tribunal reversed the order of the Appellate Controller of Estate Duty and disallowed the deduction of estate duty liability from the total estate. Section 44 of the Act provides that, in determining the value of an estate for the purpose of estate duty, certain debts and incumbrances shall be allowed as deduction. The question, therefore, is whether estate duty paya....

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....Duty Act provides that estate duty shall be the first charge on the immovable property passing on the death of the deceased. It also provides that the first charge must rank in priority after the debts and encumbrances allowable under Part VI of the Act. If it ranks in priority after the debts and incumbrances allowable under section 44, then, it cannot form part of those debts and incumbrances after which it ranks in priority. We may also add that, in the United Kingdom, since the imposition of estate duty in 1894, it was never contended that duty is liable to be deducted in determining the principal value of the estate of a deceased person. All the reported judgments of our High Courts have unanimously taken the view that estate duty. is ....