1990 (6) TMI 55

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g on account of a joint agreement dated May 1, 1944, with Bharat Bank Ltd. in arriving at the dutiable value of the estate of the deceased ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal ought to have held that the interest in the joint family property of the lineal descendants of the deceased was not includible for the purpose of determining the rate of estate duty to be paid on the property passing on the death of the deceased ?" The deceased and one Bhagwandas Mehra entered into an agreement with Bharat Bank Ltd. on May 1, 1944, as a result of which they agreed to act as guarantee brokers for the bank in respect of transactions introduced by them. The liability of the deceased and Bhagwandas Mehra und....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....le person claimed deduction of at least 1/2 of the said amount, in view of the fact that the deceased as well as Bhagwandas Mehra were jointly and severally liable to the bank in respect of the said amount. The Assistant Controller negatived this claim. The Tribunal, however, allowed the accountable person to deduct half of this amount from the estate of the deceased. The accountable person had also contended before the Tribunal that the value of the shares of the lineal descendants was not includible for the purpose of determining the rate of estate duty payable on the property passing on the death of the deceased. The Tribunal negatived this contention. In view, however, of the Tribunal's order permitting the accountable person to dedu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... guarantee for full consideration. Therefore, this is a liability which is to be deducted from the estate of the deceased. In this connection, Mr. Dastur has relied upon a decision of the Calcutta High Court in the case of Rupchand Mullick v. CED [1983] 143 ITR 103, 118, under which the Calcutta High Court has held that a debt owed by the deceased arising from a guarantee given by the deceased is liability which can be deducted from the estate of the deceased. He also relied upon a decision of the Madras High Court in the case of CED v. A. V. S. Private Ltd. [1987] 166 ITR 285. In our view, therefore, a liability which has arisen as a result of a contract of guarantee is a liability which can be deducted from the value of the estate of t....