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TMI Blog1994 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... n Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440 (SC), in arriving at the conclusion that on the death of the deceased Ramraja Ram, the entire Hindu undivided family property passed to his heirs and is thus includible in the dutiable estate ? " The brief facts of the case are that the late Ramraja Ram was the karta of a Hindu undivided family consisting of himself and his three wives, and he had all along been assessed to income-tax as well as wealth-tax in the capacity of the karta of the Hindu undivided family. After his death, the accountable persons took the stand before the Assistant Controller that the deceased Ramraja Ram had only one-fourth share in the property which passed on his death to the accountable persons and, therefore, the estate duty is leviable only on the said one-fourth interest. The Assistant Controller, relying upon a decision of this court in CIT v. K. Satyanarayan Murty [1984] 147 ITR 140, came to hold that the property belonging to the Hindu undivided family consisting of a single male member and other family members are coparcenary property and, therefore, on the death of Ramraja Ram, the entire property passed to the heirs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have fallen to the share of the deceased in the event of a partition of the family taking place immediately before the death would be deemed to be the interest of the deceased in the joint family property. The Tribunal, therefore, committed an error in directing that the entire property of the deceased would pass. Learned standing counsel for the Department, on the other hand, contended that even though the property was treated to be the property of the Hindu undivided family, both under the Income-tax Act as well as the Wealth-tax Act, and the Hindu undivided family consisted of the deceased Ramraja Ram and his three wives, on the death of Ramraja Ram, the entire property must be deemed to have passed since Ramraja Ram had unfettered power and competence to dispose of the entire property at the time of his death as is apparent from section 6 of the Act and, therefore, the Tribunal rightly rejected the petitioners' contention. In order to appreciate the correctness of the rival submissions, it would be appropriate for us to notice certain provisions of the Act itself. Section 5 of the Act provides for levy of estate duty which is the charging section. Under section 5, the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which would have been allotted to the deceased had a partition taken place immediately before his death, the provisions of this Act, so far as may be, shall apply as they would have applied if the whole of the joint family property had belonged to the deceased. " That Ramraja Ram and his three wives constituted a joint Hindu family and the property in the hands of Ramraja Ram was being taxed as Hindu undivided family property both for the purpose of income-tax and wealth-tax is not disputed. But the authority under the Act as well as the Tribunal being of the opinion that the sole surviving coparcener can dispose of the entire Hindu undivided family property as if it was his own property and applying section 6 of the Act, held that there is no necessity to take recourse to any deeming provision and the decision of the Supreme Court in Gurupad Khandappa Magdum's case [1981] 129 ITR 440 has no application. The Assistant Controller, however, solely relying upon the, Bench decision of this court in K. Satyanarayan Murty's case [1984] 147 ITR 140, came to hold that the status of a coparcener in a single coparcenary Hindu undivided family is that of an individual and, therefore, thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty on the death of a coparcener. The Supreme Court, therefore, considered Explanation 1 to section 6 of the Hindu Succession Act, 1956, and came to hold that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased. Their Lordships ultimately held that the heir will get his or her share in the interest which the deceased had in the coparcenary property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition. The provisions of sub-section (1) of section 39 of the Estate Duty Act came up for consideration in the case of CED v. Alladi Kuppuswamy [1977] 108 ITR 439 (SC). After considering the scope and ambit of the provisions, their Lordships held that on the death of Smt. Alladi, her interest in the Hindu undivided family property passed to her three sons and the value of this interest being one-fourth, the heirs would be liable to pay estate duty on the value of one-fourth share of the Hindu joint family property. In CED v. P. G. Chaware [1993] 204 ITR 513, the Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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