1979 (3) TMI 5

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....ily included a house property in which the members of the family including the deceased were residing. In the estate duty proceedings arising on the death of Rajarathnam Chettiar the Asst. Controller included for assessment the deceased's share in the house property, after allowing an exemption, under s. 33(1)(n) of the Act, of sum in proportion to the share of the deceased in the family property. Further, he included the interest of all the lineal descendants in the joint Hindu family under s. 34(1)(c) for rate purposes without giving exemption under s. 33(1)(n). On appeal by the accountable person, the Appellate Controller took the view that s. 39(3) prescribed that the principal value of the joint family property should first be ascer....

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.... be allowed in respect of the dwelling house of the Hindu undivided family from the value of the joint family properties before determining the share of the deceased and also that of the lineal descendants, the former for assessment and the latter for aggregation ?" An identical question was referred by the Tribunal under similar circumstances to this court in T.C. No. 54/72, and a Division Bench of this court in CED v. Estate of late R. Krishnamachari [1978] 113 ITR 200, after holding that the exemption granted under s. 33(1)(n) related to the house property belonging to the deceased, held that where the deceased had only an interest in the property it was only his interest that passed on his death, that as such the exemption of Rs. one....

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.... Tribunal in this case), the Bench observed (Tax LR-Noc) : " The fiction under s 39(3) should be limited for the purpose of valuation only and cannot be extended for determining exemptions. Where the residential house belongs to a Hindu undivided family governed by Mitakshara, only the share of the deceased in such house is exempt from estate duty under s. 33(1)(n). For purposes of rate of estate duty, the value of the share of the deceased in such house has to be excluded from the value of the property passing on his death under s. 34(1)(a), but the value of the shares of all the lineal descendants of the deceased in the coparcenary property including the residential house has to be aggregated under s. 34(1)(c) without any reference to ....