1981 (7) TMI 117 - AT - Income Tax

Summary

Issues:
- Interpretation of the effect of adoption on the deceased's estate
- Determination of the share of the deceased in joint family properties post-adoption
- Application of proviso (c) to s. 12 of the Hindu Adoptions and Maintenance Act, 1956
- Consideration of joint family property rights in adoption cases

Analysis:
The judgment in this case revolves around the question of whether the deceased's estate was divested due to adoption and the subsequent impact on the share of joint family properties. The deceased had adopted a boy under a deed, leading to a claim that only half of the deceased's share in joint family properties passed on his death. The Assistant Controller of Estate Duty rejected this claim, citing s. 12 of the Hindu Adoptions and Maintenance Act, 1956, which states that adoption does not divest the estate vested in the deceased. On appeal, it was argued that the adopted son had become a coparcener, making the property coparcenary property. The commentary to proviso (c) in Mulla's Hindu Law supported the view that adoption does not abrogate joint family property rights.

The judgment considered the commentary's illustrations, emphasizing that adoption does not affect self-acquired property but impacts ancestral property, making it coparcenary property. The Appellate Controller of Estate Duty accepted the accountable person's claim based on this interpretation. The Departmental Representative relied on the proviso (c) to s. 12 of the Hindu Adoptions and Maintenance Act, 1956, to argue against divesting the deceased's estate. However, the judgment upheld the accountable person's claim, noting that the previous Wealth-tax assessment order recognized the deceased as part of a joint family, further supporting the claim that the property in question was joint family property.

Ultimately, the departmental appeal was dismissed, affirming the decision that only half of the deceased's share in the joint family properties passed on his death. The judgment highlighted the importance of considering the impact of adoption on property rights and the interpretation of relevant legal provisions in such cases.