Report No. 52
9. Case of destruction by fire etc.-
During our consideration of the subject, we considered the question whether cases of destruction of the property after death by fire, earthquake, war or riot, should be treated on the same footing as the case of property acquired after death. It is true that the theory of estate duty is, that the property had come by windfall, and without any effort on the part of the heir, and that the theory breaks down in case it is found that the property is destroyed after death before the person accountable is called up to pay duty. It is also true that if there is no insurance of the property against fire, earthquake etc.,1 the accountable person gains nothing and yet has to pay the duty. The 'gain' on the date of death and before destruction of the property, is gain only on paper, or, in any case, for a very short time.
But we do not think that we should recommend a statutory provision for such cases; we apprehend that these will be few, and they can be left to be dealt with under the specific provision in the Act,2 authorising the granting of relief by the Government. Suitable action can be taken under that provision, if considered appropriate in the circumstances of the particular case.
1. See para. 3, supra.
2. Section 33(2).