1990 (1) TMI 23 - HC - Income Tax

Issues Involved:
1. Whether the adoption of a son by the widow of the deceased relates back to the date of the deceased's death.
2. Whether the deceased had full power of disposition over the property left by him.
3. Whether the property left by the deceased is includible in his estate under section 6 of the Estate Duty Act, 1953.

Issue-Wise Detailed Analysis:

1. Whether the adoption of a son by the widow of the deceased relates back to the date of the deceased's death:
The accountable person contended that the adoption of Chidambaram by the widow, Umayal Achi, should relate back to the date of the deceased Thirunavukkarasu Chettiar's death, making the adopted son a member of the coparcenary entitled to his share. However, the court referenced Section 12 of the Hindu Adoptions and Maintenance Act, 1956, particularly proviso (c), which states that adoption by a widow does not divest the estate already vested in her as the heir of her deceased husband. The court also cited the decisions in Sawan Ram v. Kalawanti, AIR 1967 SC 1761, and Punithavalli Ammal v. Ramalingam, AIR 1970 SC 1730, to support this conclusion. The adoption by the widow does not affect the nature of the property or the power of disposal over it, as the properties had already vested in the widow upon the husband's death.

2. Whether the deceased had full power of disposition over the property left by him:
The court noted that at the time of his death, Thirunavukkarasu Chettiar was the sole surviving coparcener and had the power to dispose of the coparcenary property as if it was his separate property. This power of disposal is recognized under Section 30 of the Hindu Succession Act, 1956. Therefore, the deceased had full power of disposition over the property, and this power falls within the purview of Section 6 of the Estate Duty Act, 1953.

3. Whether the property left by the deceased is includible in his estate under section 6 of the Estate Duty Act, 1953:
The court held that the deceased's widow, Umayal Achi, inherited the properties as an absolute owner under the Hindu Succession Act, 1956. The subsequent adoption of Chidambaram did not divest the properties vested in her. Therefore, the full value of the deceased's share in the properties is includible in his estate for the purpose of estate duty under Section 6 of the Estate Duty Act, 1953. The court referenced the decisions of the Supreme Court, including Sawan Ram v. Kalawanti, AIR 1967 SC 1761, and Punithavalli Ammal v. Ramalingam, AIR 1970 SC 1730, to support this view.

Conclusion:
The court concluded that the adoption by the widow does not relate back to the date of the deceased's death in a manner that would affect the vesting of the property. The deceased had full power of disposition over the property, and the value of the property left by him is includible in his estate under Section 6 of the Estate Duty Act, 1953. The question referred to the court was answered in the affirmative and against the accountable person, with the Revenue being entitled to the costs of the reference.

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