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TMI Blog1986 (12) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... r the death of the mother all her properties were handed over to the donor and she has been in possession of the same. Admittedly late Sri Murthy died intestate leaving behind him both ancestral as well as, self-acquired properties. As far as the self-acquired properties are concerned both the donor and the donee inherited them in equal shares soon after the death of their father. It is stated in the deed of gift (styled as relinquishment) that there is dispute between the donor and donee as regards the quality of the properties in the hands of late Sri Suryanarayana Murthy and regarding the rights held by the donor and the donee in those properties and those disputes were amicably settled at the instance of relatives and friends. Under the recitals of the deed the donor agreed to accept Rs. 25,000 from the donee and agreed to relinquish her half share both in the joint as well as self-acquired properties held by late Sri Suryanarayana Murthy. 3. It is not out of place to mention that the donee Sri I.V. Ramanamurthy is an advocate by profession. He had filed the estate duty return of his father as an accountable person and he also participated actively in the gift-tax proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner held that in view of the Andhra Pradesh High Court decision in CWT v. Mukundgirji [1983] 144 ITR 18 as soon as the death of the father of the donor and the donee by virtue of operation of section 8 of the Hindu Succession Act the respective shares belonging to the donor as well as the donee would remain as their respective separate properties. He further felt and held the view that so far as the share of the donor in the self-acquired properties of her father is concerned this is her separate property and it is not permissible to include it in the family settlement. In other words, he held that the assessee's share of Rs. 1,30,243 is her separate property and cannot be considered as part of family settlement. The rest of the property valuing Rs. 61,778 is joint family property and this obviously formed part of the subject matter of the family settlement. He further held that this is a transfer made for inadequate consideration and not without consideration. Inadequacy of the consideration was arrived at Rs. 1,07,829 and from this he deducted the proportionate estate duty payable over the separate property which works out to Rs. 6,052. He gave a further basic exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration of the document was not allowed to go beyond the marriage date but was finished in post-haste on 28-3-1978 only two days after the execution of the deed. Therefore, in our opinion, the document is vitiated by undue influence also. Further, there is one strong circumstance which would go to prove that the assessee never doubted the character of the properties held by her late father, Sri I.V. Ramanamurthy, an advocate, the donee herein, filed his affidavit dated 27-2-1982 before the Assistant Controller of Estate Duty, Kakinada, which was given GIR No. 2081-S. In that affidavit he admitted that he was the person liable to file the estate duty account of his late father. The estate duty account itself was filed before the Assistant Controller of Estate Duty, Kakinada on 28-2-1978. As per the Estate Duty statement signed and filed by the donee the total value of the self-acquired properties of his late father was admitted to be Rs. 1,86,013.32. From that liabilities were excluded, his share in the joint family properties was added and the value of the liabilities attached to his share of joint family properties were deducted and also the lineal descendant's share was deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. The same principle underlies the provisions of this Act. Devolution of the property of a male or female intestate upon the heirs declared by the various provisions takes place immediately on the death of the owner and it is in no manner controlled or affected by the fact of postponement or absence of actual physical partition of the property. The share of each heir becomes vested in him and if the heir dies before such partition his or her share will pass to and become vested in such persons as are his or her heirs. " Thus, it is clear that the heirs inherited as tenants-in-common but not as joint tenants. 8. Section 8 of the Hindu Succession Act states that the property of a male Hindu dying intestate shall devolve firstly upon the heirs being the relatives specified in Class I of the Schedule. In Class I, the relatives listed, inter alia, are son, daughter, widow, mother etc. According to s. 10 of Hindu Succession Act after excluding the share of the widow the surviving sons and daughters and mother of the intestate shall take one share each. Here, in this case, the deceased has no widow, he being the widower. He has no mother. He has got one son and one daughter. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all as to the nature of the properties held by the deceased and therefore it is highly improbable to believe the recital that by 25-3-1978 such a dispute arose between the son and the daughter of the deceased. Further, even on the date of death of the deceased, the donor in this case had inherited 1/2 share in the self-acquired properties and 1/4 share in the joint family property left behind by her father on the date of his death. In view of the clear provisions of s. 8 and s. 10 of Hindu Succession Act we are not prepared to accept that there was any bona fide dispute between the donor and the donee as to their respective rights in the properties left behind by their father. Further we also record that the sequence of events would clearly leave us in no doubt to conclude that in all probability the so-called relinquishment deed dated 25-3-1978 should have been brought about by use of undue influence against the donor and therefore it is also vitiated. 11. In Kale's case the essentials of a family settlement were listed out in a concretised form or in the form of the following propositions : (1) The family settlement must be a bona fide one so as to resolve family disputes and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily properties are concerned there is likelihood of the son disputing the quantum share of the daughter and hence in our view there is a scope for settlement of disputes between them. Therefore, as far as the joint family properties are concerned the impugned document can operate as a valid family settlement. In a family settlement there is no question of transfer of title from one to other and therefore there is no question of gift. 12. On behalf of the assessee the following decisions are relied upon : 1. Sahu Madho Das v. Mukand Ram AIR 1955 SC 481. 2. Laxmi Narain v. Bansi Lal AIR 1965 All. 522. 3. Ramacharan Das's case. 4. Ziauddin Ahmed v. CGT [1976] 102 ITR 253 (Gauhati). 5. H.H. Vijayba Dowager Maharani Saheb of Bhavnagar Palace's case. The learned departmental representative relied upon the following judgments : 1. Kale's case. 2. AIR 1979 AP 417 (sic). 3. Mukundgirji's case ; and 4. CWT v. Chander Sen [1986] 161 ITR 370 (SC). It is argued by the learned departmental representative that if there is no real dispute or Claim the transaction might amount to a transfer. In support of this proposition he cited the following decisions : Sashi Kantha Acharj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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