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TMI Blog1992 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... g passed on the death of the deceased and taxed the value thereof in the hands of the accountable person. On appeal, the Appellate Controller of Estate Duty reversed the order of the Assistant Controller and held that the accountable person should not have been taxed in respect of the full value of the property of the Hindu undivided family which consisted of the deceased and his wife. The decision of the Appellate Controller was affirmed by the Tribunal. Hence, this reference at the instance of the Revenue. The contention of learned counsel for the Revenue is that, as the deceased was the only male member and, as such, the sole coparcener of the Hindu joint family, section 39(1) of the Estate Duty Act, 1953, will have no application even though the family comprised the deceased and his wife. This contention is based on the ground that the wife of the deceased, even though she was a member of the joint family, had no right to claim partition. Her right was restricted. She was only entitled to get a share in the event of a partition. Till such partition took place, the male member or the sole coparcener remained the full owner of the property. Based on this notion of the law, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposition that, in a joint Hindu family, the wife who is a member is entitled to get a share as and when a partition is effected. The only restriction is that she herself is not entitled to claim a partition. But, in the event of a partition taking place, she cannot be denied her share. If that be so it is not understandable how section 39(1) will not be attracted. Section 39(1) visualises a deemed partition immediately before the death of the deceased and determination of the share of the deceased consequent to such partition. It is the share of the deceased determined in such manner which will be taken as his interest in the joint family property that ceased on his death, The Appellate Controller of Estate Duty, therefore, seems to be correct in holding that only a half share of the joint family property could be included in the estate of the deceased. The Tribunal was justified in upholding this view. This view of ours gets full support from a number of decisions of the Supreme Court We may refer to some of them. First, we may refer to the decision in the case of N. V. Narendranath v. CWT [1969] 74 ITR 190. In this case, the Supreme Court had occasion to examine the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th of a coparcener and, in that context, the effect of Explanation 1 to section 6 of the Hindu Succession Act, 1956. Section 6 of the Hindu Succession Act deals with the devolution of the interest which a male Hindu held in a Mitakshara coparcenary property at the time of his death. The proviso thereto contains the formula for fixing the share of the claimant. Explanation 1 provides that, for the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him, if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not. Dealing with the explanation, the Supreme Court observed (at page 447) : "Explanation 1 to section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener 'shall be deemed to be' the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is, therefore, required to be assumed is that partition had in fact taken place between the deceased and his coparcene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased in the Hindu joint family property. There is no reason why the ratio of the aforesaid decision of the Supreme Court should not apply to the interpretation of section 39(1) of the Estate Duty Act. We may also refer to another decision of the Supreme Court in CED v. Alladi Kuppuswamy [1977] 108 ITR 439, where the Supreme Court considered the ambit and scope of sub-section (1) of section 39 of the Estate Duty Act itself. In this case, the Revenue included a certain amount in the estate of the deceased, Smt. Alladi, on the footing that she was member of the Hindu coparcenary. Her interest in the Hindu undivided family property passed on her death 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 the one-fourth share of the joint Hindu family property. There arose a controversy as to whether the interest acquired by the deceased widow under the Hindu Women's Rights to Property Act, 1937, can be said to be a coparcenary interest in the legal sense of the term. While examining this controversy, the Supreme Court clearly observed that once a Hindu widow is held to have a coparcenary interest, then there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal interest with that of the other members of the family and if that is so, the interest of the deceased in the family property by the application of section 39 of the Estate Duty Act naturally will be only half. Counsel for the Revenue placed reliance on a Full Bench decision of the Madhya Pradesh High Court in Ramratan v. CED [1983] 142 ITR 863. In this case, it was held (at page 866): "The ownership in the property obtained by the deceased on partition was not shared by his wife although the deceased and his wife constituted a Hindu undivided family. The deceased had no son. There was thus no coparcener in his family excepting himself. The deceased was the sole coparcener in his family. Speaking generally, female members in a Hindu undivided family have no ownership in the property belonging to the family. The ownership of such a property is held by A smaller body which is called the coparcenary and in case there is only one coparcener, it is he alone who owns the entire property. It is true that for purposes of assessment of income-tax, the status of the deceased was that of a Hindu undivided family as he and his wife constituted a family but different considerations pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho was the accountable person claimed that, in the Hindu undivided family properties, her husband had a one-third share which alone passed on his death to herself and her daughter. This plea was repelled by the Assistant Controller. The decision of the Assistant Controller was affirmed by the Appellate Controller. However, on appeal, it was reversed by the Tribunal, which held that merely because the deceased was the sole member coparcener in the family-it would not mean that the character of the property underwent any change. It could not be said that the deceased was an absolute owner. His right was only to the extent of one-third and the same was liable to be included in his estate for the purpose of estate duty. The Allahabad High Court held that the deceased R was the absolute and exclusive owner of the property and that the entire property passed on his death. We have carefully gone through these decisions of the Full Bench of the Madhya Pradesh High Court and the decision of the Division Bench of the Allahabad High Court. We find it difficult to agree with the views expressed therein which, in our opinion, are not in consonance with the ratio of the decisions of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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