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Issues Involved:
1. Exclusion of Rs. 13,500 from property value. 2. Premiums paid on insurance policies as gifts under section 9(1) of the Estate Duty Act, 1953. 3. Inclusion of lineal descendants' share under section 34(1)(c) for rate purposes. Detailed Analysis: 1. Exclusion of Rs. 13,500 from Property Value: The first issue concerns the exclusion of Rs. 13,500 from the value of a property sold after the deceased's death. The deceased had agreed to bear half of the stamp duty and registration fees in an agreement for sale made during his lifetime. The Assistant Controller had adopted the sale price as the property value, but the Appellate Controller allowed a deduction of Rs. 13,500 for the deceased's share of the stamp duty. The department contested this deduction, arguing that it was not permissible under the Estate Duty Rules, 1953. However, the Tribunal upheld the Appellate Controller's decision, reasoning that the expenditure on stamp duty effectively reduced the sale price of the property, and thus the deduction was appropriate. 2. Premiums Paid on Insurance Policies as Gifts under Section 9(1) of the Estate Duty Act, 1953: The second issue is whether the premiums paid on insurance policies within two years of the deceased's death could be considered gifts under section 9(1) of the Estate Duty Act, 1953. The deceased had taken nine insurance policies, with the beneficiaries being his wife and children. The Assistant Controller included the premiums paid within two years of death (amounting to Rs. 51,104) as gifts under section 9, but the Appellate Controller deleted these additions. The Tribunal examined whether the premiums constituted an "immediate gift inter vivos." It concluded that the premiums paid to the insurance company did not constitute an immediate gift to the beneficiaries, as the beneficiaries' interest was contingent and only matured upon the policy's maturity. Therefore, section 9 could not be invoked, and the premiums were not dutiable. 3. Inclusion of Lineal Descendants' Share under Section 34(1)(c) for Rate Purposes: The third issue concerns whether the lineal descendants' share can be included under section 34(1)(c) for rate purposes. The Appellate Controller had ruled against invoking section 34(1)(c), but the Tribunal noted that most High Courts, except the Madras High Court, had ruled in favor of the department on this issue. The Tribunal clarified that section 34(1)(c) does not charge the lineal descendants' share to estate duty but merely determines the applicable rate. The Tribunal rejected the argument that the section was unworkable due to a lack of machinery for evaluating the lineal descendants' share. It referred to the Calcutta High Court's decision in Satyanarayan Saraf v. Assistant Controller, which indicated that section 39 provides the machinery for ascertaining the principal value of the joint family property for section 34(1)(c) purposes. The Tribunal also noted that in cases of partial partition, the unpartitioned assets are presumed to be held as tenants-in-common, making it feasible to determine the lineal descendants' share. Consequently, the Tribunal held that the lineal descendants' share was rightly included for rate purposes under section 34(1)(c). Conclusion: The appeal filed by the accountable person was dismissed, and the department's appeal was partly allowed. The Tribunal upheld the Appellate Controller's decision on the exclusion of Rs. 13,500 from the property value and the non-applicability of section 9 to the insurance premiums. It also ruled that the lineal descendants' share could be included under section 34(1)(c) for rate purposes.
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