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Issues:
1. Applicability of section 9 of the Estate Duty Act in a partial partition of a Hindu undivided family. 2. Interpretation of section 2(15) and Explanation 2 in relation to estate duty assessment. Detailed Analysis: Issue 1: The first issue pertains to the applicability of section 9 of the Estate Duty Act in a partial partition of a Hindu undivided family. The deceased, along with his brothers, underwent a partial partition where the deceased received a share of lesser value compared to his total share in the family property. The Assistant Controller contended that there was a deemed gift due to the difference in value, invoking sections 2(15), 9, and 27(1) of the Act. However, the Tribunal disagreed, stating that since it was a partial partition and the family had other assets, there was no unequal distribution, and the deceased still had rights over undivided properties. The Tribunal concluded that there was no gift involved. The Appellate Controller upheld the inclusion of the deemed gift, emphasizing that no distinction should be made between complete and partial partitions under Explanation 2 to section 2(15) of the Act. Issue 2: The second issue involves the interpretation of section 2(15) and Explanation 2 concerning estate duty assessment. The court referred to a specific recital in the partition deed indicating a complete partition without any reservation of rights by the deceased. Citing the Supreme Court's ruling in CED v. Kantilal Trikamlal, the court emphasized that even in a partial partition where a coparcener receives less than their share, it constitutes a disposition under Explanation 2 to section 2(15). The court highlighted that the intention of the law is to consider any relinquished share as a disposition, regardless of the partition's completeness. Therefore, the Tribunal's decision that the deceased's lesser share could be adjusted in a future partition was deemed incorrect. Consequently, the court ruled in favor of the Revenue, holding that section 9 applied, and there was a deemed gift involved in the partial partition. In conclusion, the court's judgment clarifies the application of estate duty laws in cases of partial partitions within Hindu undivided families, emphasizing the deemed gift implications under relevant sections of the Act. The interpretation of Explanation 2 to section 2(15) underscores the broader scope of what constitutes a disposition, irrespective of the partition's completeness, ensuring a comprehensive assessment of estate duty liabilities in such scenarios.
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