- (1.) This appeal by certificate arises from the judgment of the Andhra Pradesh High court dated 23/03/1977 in Estate Duty case No. 6 of 1975. Answering the questions referred to it against the appellant and in favour of the revenue, the High court held that, in computing the net principal value of the estate for the purpose of the Estate Duty Act, 1953 ("the Act") , the appellant was not entitled to deduct either the estate duty payable on the estate or the amount attributable to the maintenance of the wife of the deceased.
(2.) The appellant's counsel, Mr T. A. Ramachandran, submits that the duty payable on the estate of the deceased is an encumbrance on theestate, being a first charge on the property passing on the death, and is, therefore, deductible in terms of S. 44 of the Act. According to counsel, all properties passing on the death of the deceased are encumbered to the extent of the duty payable by reason of the charge created by S. 74 of the Act and that duty has to be deducted from the total value of the estate which is subjected to the levy of duty in terms of S. 5. Counsel further submits that the amount attributable to the maintenance of the wife during the life of her husband must also be treated as a debt deductible under S. 44.
(3.) Mr S. C. Manchanda, appearing for the revenue, submits that the claim of the appellant has no warrant in the law and is totally unsupported by any judicial decision. He submits that estate duty falls upon the property passing upon the death. The property at the time of the passing was not encumbered by the duty, for duty became payable only upon its passing and was, therefore, not a liability to which the estate was subjected during the life of the deceased. It became so encumbered only subsequent to and consequent on the death. He further submits that there is not the smallest foundation for the claim for deduction in respect of the maintenance of the wife during the life of the husband, as contended by the appellant's counsel, for the estate was never charged with the amount attributable to the maintenance of the wife. A wife's claim for maintenance either during the life of her husband, or subsequent to the death of her husband, is not a charge on the property and is not a deductible amount in terms of the Act.;