Law:

Section:

Section 5, read with section 36 of the Estate Duty Act, 1953 - Property passing on death - Whether life interest of deceased in certain property passed on date of his/her death and it is not concerned with title or ownership of property - Held - yes - Whether principal value of property covered by life interest has to be determined in accordance with provisions of section 36 - Held, yes - Whether where Tribunal proceeded on footing that property of deceased passed to successor on date of deceased's death under section 5, it was not justified in equating life interest enjoyed by deceased with fractional ownership but determination of valuation of property by Tribunal by applying multiplier of 12½ times, could not be said to be erroneous - Held, yes FACTS The Assistant Controller determined the net principal value of the estate of the deceased at Rs. 12,55,213. In computing the net principal value, he valued the life interest of the deceased in certain property, at Rs. 5,62,000 as against the value of Rs. 3,94,000 returned by the accountable person based on the valuation of the approved valuers. On appeal, the Appellate Controller, taking due note of the order of the Tribunal in the wealth-tax assessment fixing the rental of the ground floor at Rs. 950 per month as reasonable, determined the value of the property at Rs. 5,15,000. On second appeal, the Tribunal equated the life interest of the deceased with a fractional ownership and applied the multiplier of 121/ 2 times for the purpose of determining the value of the premises determined the valuation of the property at Rs. 4,06,962. On reference under section 64(3) : HELD In view of the provisions of section 5, life interest itself passes on death. Section 5 is not concerned with the title or ownership. Once the interest itself passes under section 5, the entire property covered by the interest is to be valued in accordance with the provisions of section 36. Where the interest ceases on the death of the deceased and benefit accrues or arises by reason of the cesser of such interest, the provisions of section 40 will be attracted for the purpose of valuation. It appeared that in this case, the departmental…

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