H.H. VIJAYABA RAJAMATH AND ANR. versus CONTROLLER OF ESTATE DUTY KARNATAKA, BANGALORE

Citation: [1997] SUPP. 1 S.C.R. 520 · Decided: 08-07-1997 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Dismissed

Judgment (excerpt)

A 
H.H. VIJAYABA RAJAMATH AND ANR. 
·-
v. 
CONTROLLER OF ESTATE DUTY 
KARNATAKA, BANGALORE 
B 
JULY 8, 1997 
[S.C. AGRAWAL AND D.P. WADHWA, JJ.] 
Estate Duty Act, 1953-Sections 30,48,49-Assessment of estate 
c 
duty-Properties situated both in England and in lndia--Death duty paid in 
U.K-Disallowance claimed u/s 48 of the Act-Whether maintainable-Held, 
No-:R.elief already granted u/s 30 of the Act-Death duty paid in U.K could 
not be treated as an expense. 
Appellant's father died leaving behind extensive properties both in 
D England and in India. For death duty paid in the United kingdom relief 
had already been afforded to the appellants by virtue of an agreement 
entered into between India and United kingdom for avoidance or relief of 
double taxation with respect tCI estate duty u/s 30 of the Estate Duty Act, 
1953. Appellants', claim that this amount of estate duty paid in U.K. be 
E treated as cost of realising or administering foreign property, an addition-
al expense, and thus allowable u/s 48 of the Act was disallowed by the 
Tribunal. As regards the interest paid on delayed payment of the death 
duty in England and interest on service charges paid to the Bank, the 
Tribunal held that no material was produced to show that these amounts 
F 
would not have been incurred if the property was in India and not in U.K. 
and that the property in U.K. consisting of certain deposits and war bonds 
which could be easily realised. As regards amount paid towards Solicitor's 
fee in London, the Appellate Controller of Estate duty allowed the deduc-
~ 
tion, holding that it was an additional expense in administering or in 
realising the property by reason of the property being situate outside 
G India. The question referred to the High Court was as to whether, on the 
facts and in the circumstances of the case, the Tribunal was justified in 
confirming the disallowance claimed by the accountable persons u/s 48 of 
the Act, in respect of the death duty paid in U.K., interest paid on death 
duty in U.K., interest payment to Lloyds Bank in U.K., and loss on 
H devaluation. The reference was answered in the affirmative in favour of the 
520 
H.H. VIJAYABARAJAMATH v. CONTROLLEROFESTATEDUIT,KARNATAKA 
521 
Revenue and against the accountable persons. The present appeals were A 
filed by the accountable persons against the judgment of the High Court 
in the reference cases. 
Dismissing the appeals, this Court 
HELD : Estate duty falling upon the estate passing on the death of B 
the deceased is not deductible in computing the net principal value of the 
estate for the purposes of the Act. Allowance of the estate duty paid in U.K. 
was given in the estate duty payable in this country. The death duty paid in 
U.K. could not be treated as an expense for which the appellants were 
entitled to claim as an additional expense in administering or in realising C 
the property falling u/s 48 of the Estate Duty Act, 1953. Section 49 of the 
Act applied where any property passing on the death of the deceased is 
situated in a non-reciprocating country and the Controller of Estate Duty 
may make an allowance of the whole or any part of the amount of the estate 
duty payable in the non-reciprocating country from the value of the proper-
ty. Reading Ss. 48 and 49 together it is difficult to hold that where there was D 
an agreement u/s 30 of the Act the estate duty payable in the reciprocating 
country was never the less to·be deducted or given an allowance from the 
value of the property left by the .deceased. It was not the case of the appel-
lant that u/s 30 of the Act in terms of the agreement between the two 
Governments, i.e. the Government of India and the Government of United E 
kingdom, relief had not been granted to the appellants under Article VI of 
the Agreement. The appellants were only entitled to deduction of the death 
duty paid in England out of the estate duty payable as computed by the 
authorities under the Act. in this country. [526-B-F] 
P. Leelavathamma v. Controller of Estate Duty, (1991) 188 ITR 303, F 
relied on. 
CIVIL APPEALLATE JURISDICTION 
Civil Appeal Nos. 
2389-90 of 1981. 
From the Judgment and Order dated 27.2 1980 of the Karnataka G 
High Court in TRC No. 122175 and TRC 81 of 1977. 
G.C. Sharma, P.H. Parekh and Indu Verma for the Appellants. 
Ranbir Chandra, Anil Srivastava, BK Prasad and C. Radha Krishna 
for the Respondent.. 
H 
522 
SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R. 
A 
The Judgment of the Co

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