1988 PLP 425 (PTD)

AJMAL MIAN, J.-- This is an application under section 59-A(1) of the Estate Duty Act, 1950, hereinafter referred to as the Act read with Rule 38 of the Estate Duty Rules, 1950, hereinafter referred to as the Rules whereby the following four questions have been raised "(1) Whether there was no evidence to justify that the deceased had Rs.1,00,000 as cash in hand at the time of his death? (2) Whether in the facts and circumstances of the case, the Tribunal was right in taking as the principal value the total amount of the recoveries made from the 20 horses during 6 years succeeding the death of the deceased? (3) Whether in the facts and circumstances of the case, the Tribunal was right in resting its decision as to the principal value of the building at Chowk Yadgar, Peshawar on the principle of valuation on the basis of annual rental value? (4) Whether by paying earnest money of Rs.20,000 towards an L agreement to sell. the deceased acquired property within the meaning of section 6, Estate Duty Act, 1950 and whether the same is valued in accordance with section 38, Estate Duty Act, 1950."

2. It seems that one Mohammad Usman Azad, hereinafter referred to as the deceased expired on 11-9-1964. The Controller of Estate Duty by his order, dated 4-7-1970 assessed the estate of the deceased for estate duty. The accountable persons filed an appeal on 5-7-1970 against the above order. In the above appeal the learned Appellate Tribunal appointed a valuer for certain items, who submitted his report, dated 23-9-1972. After that the learned Appellate Tribunal after hearing the parties passed an order, dated 28-6-1972, which has given rise to the filing of the present reference.

3. The respondents were served and Mr. Nasrullah Awan, as far back as on 10-10-1983 undertook to file Vakalatnama which has not been done till today. The notice of intimation of today's date of hearing was sent to the respondents on 28-11-1987. Nobody has turned up for the respondents. As this is a reference of 1972, we have proceeded with the same. 4, In support of the above reference, Mr. Noor Mohammad, learned counsel for the accountable persons has urged as follows:- (i) That in the absence of any cogent evidence that factually the deceased had left behind a cash of Rs.1,00,000 the Controller or the Appellate Tribunal was not justified in presuming that factually he had left the above amount and assessing the same for estate duty. (ii) That the valuation of 3 horses owned by the deceased and of 20 horses sold on contingency was not based on any reliable method. (iii) That the valuation of the building situated at Chowk Yadgar, Peshawar namely 20 times of the annual rental value of the building is also not based on any principle of law. (iv) That the inclusion of Rs.20,000 being the earnest money given by the deceased for purchasing a plot of land was also unwarranted by law.

5. Adverting to the first submission of Mr. Noor Muhammad that in the absence of any cogent evidence that factually the deceased had left behind a cash of Rs.1,00,000, the Controller or the Appellate Tribunal was not justified in presuming that factually he had left the above amount and assessing the same for estate duty, we are inclined to agree with him that the inclusion of the above sum without having any basis that factually the amount was available with the deceased on the date of his death is based on surmises and conjectures. The factum that the deceased's son had committed theft of Rs.90,000 which incident was reported to the police and that the deceased was fond of horse racing, would not prove the fact that factually the deceased had the above sum of Rs.1,00,000 on the date of his death. Accordingly, our answer to the above-quoted question No.l is in the affirmative. Adverting to the second submission of the learned counsel for the accountable persons that the valuation of 3 horses owned by the deceased and of 20 horses sold on contingency was not based on any reliable method, it may be pointed out that the method adopted by the learned income-tax Appellate Tribunal appears to be most reasonable and beneficial to the accountable persons in the absence of any other mode pointed out to them. As a matter of fact the Appellate Tribunal has given substantial benefit to the accountable persons in this regard and the valuation has been reduced from Rs.2,28,000 to Rs.80,000 which is the amount factually received. In our view, the answer of the above-quoted question No.2 is in the affirmative. As regards the third submission of Mr. Noor Muhammad learned counsel for the accountable persons that the valuation of the building situated at Chowk Yadgar, Peshawar namely, 20 times of the annual rental value of the building is also not based on any principle of law, it may be observed that the Controller had worked out the valuation of the above building in question on the basis of 30 years rental, whereas the Appellate Tribunal has reduced the valuation to the extent of 20 years rental. The accountable persons had not produced any evidence as to the original purchase price, which the deceased had paid nor, any other evidence to indicate the market value obtaining in respect of similar buildings in Chowk Yadgar, which is in the heart of the Peshawar Town. In the absence of any other material made available to the Controller or to the Appellate Tribunal, in our view, the above basis was just and proper and the answer of the above-quoted question No.3 is in the affirmative. Taking up the last submission of the learned counsel for accountable persons, namely, that the inclusion of Rs.20,000 being the earnest money given by the deceased for purchasing a plot of land was also unwarranted by law, it will suffice to observe that Rs.20,000 paid as earnest money to the owner of the plot situated in Garden East was an asset or debt recoverable by the accountable persons from the owner of the plot. The Controller had included a sum of Rs.30,000 on account of the purchase of the plot which amount has been reduced to Rs.20,000 by the Appellate Tribunal which is actual amount paid by the deceased to the owner of the plot and which amount was recoverable as part of the estate of the deceased. Our answer, therefore, to the above question No.4 is also in the affirmative.

6. The reference stands disposed of in the above terms with no order as to costs. M. B. A./O-6/ K Reference disposed of.