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Issues Involved:
1. Whether the Tribunal was right in law in holding that one-half share in the movable property of the Hindu undivided family passed on the death of Smt. Manigauri. 2. Whether the Tribunal was right in law in rejecting the contention that, due to the release of his interest from the movable property of the Hindu undivided family by Trikamlal, Manigauri inherited no share therein on his death and no part of it could pass on her death as her property. Issue-wise Detailed Analysis: Issue 1: One-half Share in the Movable Property Passing on Death The Tribunal held that one-half share in the movable property of the Hindu undivided family passed on the death of Smt. Manigauri. The Assistant Controller of Estate Duty had included only one-sixth share in the movable property for computing the principal estate of the deceased Manigauri. The Tribunal found that the entire movable property vested in Manigauri and her son Babulal after the release of one-third share by Trikamlal. Thus, on the death of Manigauri, it was not just one-sixth share but one-half share in the movable property that had passed. The Tribunal dismissed the appeal of the accountable person, concluding that the assessment order had not disadvantaged the accountable person. Issue 2: Rejection of Contention Regarding Release Deed The Tribunal rejected the contention that due to the release deed dated January 29, 1964, by Trikamlal, Manigauri inherited no share in the movable property on his death. The Tribunal found that the release deed was not considered in the assessment order. It held that the one-third share of Trikamlal in the movable property stood released with effect from January 29, 1964, and thus, he had no share in the movable property at the time of his death. However, this did not help the accountable person since the entire movable property vested in Manigauri and Babulal, and thus, on her death, one-half share passed. High Court Analysis: The High Court referred to the decision in CED v. Babubhai T. Panchal [1982] 133 ITR 455 (Guj) and found that the provisions of Explanation 2 to section 2(15) were not attracted in the case of the release by Trikamlal. The court held that the release deed was not a disposition of property under Explanation 2 to section 2(15) since the property was not partitioned and his share had not become defined. The court analyzed sections 5, 7, 9, 27, and 39 of the Estate Duty Act and concluded that the release of an undefined share by a coparcener in the joint family property amounts to a disposition. The court held that the Tribunal was incorrect in holding that Trikamlal had no share in the movable property that could pass to his heirs. The release deed was deemed a disposition made by the deceased within two years before his death and was treated as a gift under section 9 read with section 27. Thus, the undefined share in the movable property was required to be treated as a gift and passed on his death in favor of Manigauri and Babulal. Conclusion: The High Court answered question No. 2 in the affirmative, holding that the release deed was a disposition of property within the meaning of Explanation 2 to section 2(15) of the Act. The court answered question No. 1 in the negative, affirming that only one-sixth share in the movable property passed on the death of Smt. Manigauri. The reference was disposed of with no order as to costs.
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