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TMI Blog1969 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Ltd. On July 29, 1960, a deed of partial partition was drawn up between all the seven members of the family. The partial partition was confined to the said 1,320 shares. At the date of this partial partition, out of the five sons, one son, Harshad, had attained majority and the other four sons, viz., Udayan, Vijay, Piyush and Pundrik, were minors and the assessee and her husband, Hariprasad, represented the interests of the minors in the said partial partition. Before the partition by metes and bounds was carried out under the said deed of partial partition, the assessee had agreed not to claim any share on the partial partition as regards the said 1,320 shares and in the deed of partial partition drawn up in this connection, the assessee declared that she had agreed that on this partial partition she did not want any allotment of the said shares and accordingly the said 1,320 shares were allotted to the remaining six coparceners equally, i.e., 220 shares to the husband of the assessee and each of the five sons of the assessee. The shares coming to each of the four minor sons were accepted by the assessee and her husband acting as guardians of the said minor sons. On Aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not liable to gift-tax in respect of this particular action of hers. It was also held by the Tribunal that the assessee had no interest in the shares till the point of partition and that she had not attempted to transfer any interest in favour of any person, as she did not hold any property or any interest in the property, which could be gifted away by her. It was also held by the Tribunal that abandonment or non-enforcement of her right to claim a share did not fall within the first part of the definition of "gift" in section 2(xii) of the Act; and further that there was no question of release, discharge, surrender, etc., of any debt or contract covered by section 4(c). It was also held by the Tribunal that the assessee could not be said to possess any actionable claim as defined in section 3 of the Transfer of Property Act. The Tribunal further held that the option of the assessee to claim a share on partition was to mature into an interest in property only at the end of the successful exercise of option and as the assessee did not hold any interest in the property, the question of its release, surrender or abandonment did not arise. It was further held in the alternative by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to be a gift made by the person responsible for the release, discharge, surrender, forfeiture or abandonment;..." In the instant case, we are concerned with a partition between the coparceners, which was partial as to the property. This is not a case of a partial partition where only one or more coparceners separated from the rest of the coparceners. As regards the question of intention, in Raghavamma v. Chenchamma, at page 151, in paragraph 31 of the report, Subba Rao J. (as he then was), delivering the judgment of the Supreme Court, has observed: "We agree with the learned judge in so far as he held that there should be an intimation, indication or expression of the intention to become divided and that what form that manifestation should take would depend upon the circumstances of each case. But if the learned judge meant that the said declaration without it being brought to the knowledge of the other members of the family in one way or other constitutes a severance in status, we find it difficult to accept it. In our view, it is implicit in the expression 'declaration' that it should be to the knowledge of the person affected thereby. An uncommunicated decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to share in her husband's estate, on partition of the estate between the sons, accrues only when a partition is actually made. In that case a Hindu died leaving a widow and two sons. One of the two sons died subsequently, leaving a son, who brought the suit for partition and possession of his share in his grandfather's estate. The trial court held that the widow was entitled to a one-third share and passed a preliminary decree. Before, however, a final decree could be passed, the widow died and the Division Bench held that the share which the widow would have taken, if an actual partition had been effected, was never severed from the estate and consequently remained an integral part of the estate available for division amongst the heirs of her husband. Thus, even though there was a preliminary decree for partition, because of the fact that partition by metes and bounds had not been actually carried out and the share coming to the widow of the propositus had not been severed from the estate of the propositus, the Division Bench came to the conclusion that the widow had not become entitled to any share and hence, on her death, the property which she would have got if the partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me the owner of the share mentioned therein, and at the date of the decree in the mortgage suit had no right or title in or to the mortgaged property or any interest therein entitling her to redeem. The decree in the mortgage suit was valid and enforceable and the appellants' suit for a declaration that it was binding on the wife was maintainable; and at page 45 of the report Sir Lancelot Sanderson, stating the opinion of the Privy Council, has observed: "In their Lordships' opinion, the above-mentioned decisions (Sheo Dayal's case, Beti Kunwar v. Janki Kunwar, and Raoji Bhikhaji's case) correctly represent the Mitakshara law on the matter now under consideration, for it is not suggested that there is any difference in this respect between the rights of a wife and those of a mother or grand-mother." In view of this decision of the Privy Council, it is clear that unless and until actual partition takes place, the mother or the grand-mother has no actual right in the property and until the actual stage of partition by metes and bounds, she has merely a right of maintenance. We may also mention at this stage that, as pointed out by the Nagpur High Court in Mt. Bhiwra v. Mt. Renu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of partial partition, the assessee had no right to demand a partition; nor had she any right in the particular property which was proposed to be partitioned. It is also clear that if any share had been allotted to her, she would have got it in lieu of her right to maintenance. However, on behalf of the revenue, the learned Advocate-General has relied upon two Full Bench decisions of the Bombay High Court. The first in point of time is the decision in Sakarchand Satidas v. Narayan Savla. There the Full Bench has held that under Hindu law the share of the alienee of joint family property is to be determined at the date of the alienation and not at the time when the alienee asks for an equitable partition of the property. This principle regarding the right of the alienee of joint family property was considered by the second Full Bench in Parappa Ningappa v. Mallappa Kallappa; and there the Full Bench held that under Hindu law, in a suit by a son for partition and separate possession of his share after setting aside the alienation of joint family property made by his father, the mother, who is a party, is entitled to a share, if the court comes to the conclusion that the alienation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of the alienation. In Parappa Ningappa v. Mallappa Kallappa a further fiction was pressed into service, viz., that an actual partition by metes and bounds having taken place on the date of the alienation must be presumed and thus there are two different legal fictions, one regarding the share of the alienee, and, secondly, in determining that share, provision being made for the shares which the wife or the mother or the grand-mother would have taken if a partition had been effected by metes and bounds as of the date of the alienation. Thus, neither of these two Full Bench decisions affect in any manner the legal position which energes from the decision of the Bombay High Court in Raoji Bhikhaji's case and as approved by the Privy Council in Pratapmull's case. It was contended on behalf of the revenue before us that at the time when the assessee agreed not to claim any share in the 1,320 shares on such partial partition, she had 1/7th share at that moment of time and by agreeing not to claim her 1/7th share she has surrendered or renounced her 1/7th share in the property because this was a determinate and existing right. This submission of the learned Advocate-General is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it cannot be said that by agreeing not to claim any share on this partial partition, she was diminishing directly or indirectly the value of her own property and to increase the value of the property to any other person within the meaning of section 2(xxiv)(d) of the Act. Since she had no interest in property, it cannot be said that there was any release, discharge, surrender or abandonment of any actionable claim or any interest in property within the meaning of section 4(c) of the Act. It is, therefore, clear that there was no gift by the assessee within the meaning of seetion 2(xii) or within the meaning of section 4(c) of the Act. In connection with section 4(c), we may also point out that the Tribunal has found as a fact that even if the assessee can be said to hold some interest in the property, her decision not to exercise her option to share on partition was a perfectly bona fide one and, therefore, the question of levying tax under section 4(c) does not arise in the instant case. Thus, as regards the alternative case, under section 4(c), the Tribunal has found as a matter of fact that the agreement not to claim share was a perfectly bona fide transaction. We, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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