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TMI Blog1982 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... n-broking business as on the date of partition was Rs. 2,76,727. In the partial partition, a sum of Rs. 46,121 was allotted to the share of the deceased and the balance of Rs. 2,30,606 was allotted to the share of the deceased's son. Against the assessee's rightful half share of Rs. 1,38,364, he was actually allotted in the partition only a sum of Rs. 46,121 and the difference amounting to Rs. 92,243 was included in the principal value of the estate of the deceased under section 9 read with Explanation 2 to section 2(15) of the Act. This inclusion was questioned by the accountable person before the Appellate Controller of Estate Duty who, however, deleted the addition of Rs. 92,243, holding (1) that there is no question of extinguishment at the expense of the deceased of a debt or other right so as to deem it as a disposition to attract Explanation 2 to section 2(15) of the Act ; (2) if in partial partition, one member takes a lesser share, it is always open to the members of the family to make good the difference at the time of final partition and as such it will be presumptuous on the part of the Assistant Controller to conclude that there had been a surrender or waiver of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that one member got property less than what he would have got if the partition was made equal had no significance and that in this case, the partition being partial, if the deceased had taken a lesser share, it is always open to have the difference adjusted at the time of the final partition and, therefore, it cannot be taken that there has been a surrender or waiver of an interest by the deceased or extinguishment of any right at the instance of the deceased. In support of the above contention, reference has been made to the decisions in CGT v. N.S. Getti Chettiar [1971] 82 ITR 599 (SC) and CED v. Kancharla Kesava Rao [1973] 89 ITR 261 (SC). However, we are of the view that those decisions are not applicable to the facts of this case and the decision of this court in Ranganayaki Ammal v. CED [1973] 88 ITR 96 (Mad), which has been approved by the Supreme Court in CED v. Kantilal Trikamlal [1976] 105 ITR 92, squarely applies to the facts of this case. In N. S. Getti Chettiar's case [1971] 82 ITR 599 (SC), the question that arose before the Supreme Court was whether a partition between the members of a joint family will constitute a disposition of the property for purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... linquishment by the deceased of a slice of his share on partition of the joint family by taking a share less than what is due effected within two years of his death with a view to relieve himself of a part of his wealth and to benefit a near relation, is chargeable to estate duty under the Estate Duty Act, 1953, arose. After referring to section 5, the charging section, and section 2(15), defining property, and the Explanation thereto as also sections 9 and 27, the Supreme Court held that though in a Hindu undivided family coparceners have no predictable or defined shares but each has an antecedent title in every parcel of property and is jointly the owner and in enjoyment with the others, once a partition takes place, their shares become predictable and definite and that in such a partition if one coparcener takes a lesser share than what is due to him and the difference in value produced by voluntary relinquishment of a portion of his share and the benefit conferred by that section on the other coparceners will fall within the expression " disposition " as per Explanation 2 to section 2(15) and, therefore, it will be caught within the coils of section 5 read with sections 9 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to arrive at the valuation of the right which was being released or disclaimed by the deceased and, as such, it cannot be taken to be a disposition as contemplated by Explanation 2 to section 2(15). The decision in that case is based on the reasoning that a release before the actual or a notional partition under section 39 can only be taken of as being indefinite and indeterminate, a value which cannot be taken as a disposition under Explanation 2 to section 2(15). However, the said decision specifically proceeds on the basis that if there has been a partition and there is release of a portion of one coparcener's due share in favour of another coparcener, it will amount to a disposition under Explanation 2 section 2(15). Therefore, the said decision instead of helping the assessee supports the case of the Revenue in this case. The learned counsel for the accountable person contends that any inequality in the shares in a partial partition can be adjusted in the final partition and, therefore, there cannot be a waiver of interest by the deceased in this case where the joint family still continues and a final partition yet to take place. It is also contended by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok a lesser share on the understanding that the difference in the value of the share will be made good at the time of the final partition. Therefore, the application of section 9(1) read with section 27 and Explanation 2 to section 2(15) of the Act in this case are legally permissible. Even assuming that the partial partition is only a tentative one subject to the condition that the rights are to be adjusted finally at the final partition, section 39 of the Act brings about a notional partition between the deceased and his son just before his death and the difference in share value which, according to the accountable person, is to be adjusted at the time of final partition will have to be taken as such asset of the deceased on the date of his death in which case section 7 will stand attracted. Thus, there is no escape from the position that the difference in value will have to be added to the principal value of the estate of the deceased for estate duty purposes. Thus, the first question is answered in the affirmative and in favour of the Revenue. Coming to the second question as to whether the sum of Rs. 10,000 is to be included under section 9 of the Act, it is seen that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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