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TMI Blog2003 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the estate left by the deceased for rate purposes under section 34(1)(c) of the Estate Duty Act, 1953?" The estate duty account in respect of the estate of Dahyabhai Maneklal who passed away on November 9, 1962, was filed on November 21, 1963. The Assistant Controller of Estate Duty, Ahmedabad, in the assessment order made under section 58(3) of the said Act worked out the value of the estate of the deceased in the Hindu undivided family and came to the conclusion that 1/5th share of the deceased in the Hindu undivided family was of the value of Rs. 3,23,541. The interest of three lineal descendants of the deceased was valued at Rs. 9,70,623 and this exercise was done for aggregation as contemplated by the provisions of section 34(1) of the Act under which for the purpose of determining the rate of the estate duty to be paid on any property passing on the death of the deceased, all property so passing, and, where it consisted of a coparcenary interest, also the interests in the joint family property of all the lineal descendants of the deceased member were required to be aggregated so as to form one estate and the estate duty was to be levied thereon at the rate applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law, also the interests in the joint family property of all the lineal descendants of the deceased member; shall be aggregated so as to form one estate and estate duty shall be levied thereon at the rate or rates applicable in respect of the principal value thereof." The principal value is required to be worked out under the said provision for the purpose of determining the rate of estate duty to be paid on any property passing on the death of the deceased, though interest of all coparceners other than the deceased in the joint family property of a Hindu family falls within the expression "property exempt from estate duty", due to the effect of the provision of sub-section (2) of section 34 read with Explanation (iii) thereof. For the purpose of working out the rate under section 34(1)(c) of the Act, the interest in the joint family property of all the lineal descendants of the deceased member is to be aggregated with all the property passing on the death of the deceased. The said provision of sub-section (1)(c) is not concerned with the devolution of the interest of the deceased in the joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re his death. Thus, we are concerned with the situation that may arise on a notional partition of joint family property of a Hindu family immediately before the death of a coparcener. The words "lineal descendants" occurring in clause (c) of sub-section (1) of section 34 would mean persons in the direct line of descent of the deceased such as child or grandchild as contrasted with a collateral descendant. Wives of lineal descendants would obviously not be lineal descendants of the deceased. The moot question, however, is whether the wife of one of the three sons of the deceased who was married and in respect of whom the question has arisen, had any share in the property of the Hindu undivided family on the notional partition resulting due to death of the father. The only property that can be divided on partition is coparcenary property. The joint family or coparcenary property is that in which every coparcener has a joint interest. In State Bank of India v. Ghamandi Ram, AIR 1969 SC 1330 the Supreme Court observed that coparcenary property is held in collective ownership by all the coparceners in a quasi-corporate capacity. The incidents of a coparcenary are: (i) the lineal ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property on the notional partition. On the death of Dahyabhai there were five sharers as a result of the notional partition taking place immediately before his death, namely, share of the deceased, his wife and his three sons. This is why the share of the deceased in the Hindu undivided family was computed as 1/5th in the Hindu undivided family property. Therefore, in our opinion, the Assistant Controller of Estate Duty had correctly computed the value of the interest of three lineal descendants for the purpose of aggregation under section 34(1)(c) and aggregated the value of that share with the value of 1/5th share of the deceased and thereby worked out the principal value under section 34(1)(c) of the Act. The Revenue has relied on the decision of the Calcutta High Court in the case of Satyanarayan Saraf v. Assistant Controller [1978] 111 ITR 432 in which it was held that section 39 of the Act contemplates a notional partition of the joint family property immediately before the death of the deceased in order to ascertain the principal value and as a notional partition has to be resorted to, full effect should be given to the principles of Hindu law relating to partition of prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after such a notional partition. It would be a question of fact to be determined in each case whether a partition takes place and whether there was a separation among other coparceners or they remain united, in a case where partition takes place at the instance of any coparcener. However, in case of a notional partition no intention to separate can be attributed to the remaining coparceners merely by virtue of such notional partition which is deemed to have taken place immediately before the death of the deceased coparcener for the purpose of the Act. Such partition should be viewed as a separation of the deceased coparcener from the other coparceners and not a partition amongst all the coparceners, unless otherwise intended by them on the demise of the coparcener. On a partition between father and son each takes a share equal to that of the father. Thus, if a joint family consists of a father and three sons, the property will be divided into four parts, each of the four members taking one-fourth and each branch taking "per stripes", i.e., according to the stock. As noted above, if the partition takes place between her husband and his son, the wife is entitled to receive a share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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