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TMI Blog1972 (8) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ference between the value of the share of the deceased and the value of the property received by the deceased ? " The facts giving rise to this reference may shortly be stated. We are concerned in this case with the estate of Shri Vadilal Chhaganlal. Prior to December 5, 1959, Vadilal Chhaganlal and his son, Chandulal Vadilal, were members of a joint Hindu undivided family. On December 5, 1959, these two members of the joint family executed a document which they called " vahchani patrak " (document of partition) and this document has been referred on the record by some of the authorities as a release deed. Under the terms of this document, Vadilal Chhaganlal, the deceased, received an amount of Rs. 1,53,000 in cash and also a life interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Estate Duty Act. He, therefore, added this amount to the principal value of the estate and made the assessment accordingly. Against this decision of the Assistant Controller of Estate Duty, the matter was taken in appeal to the Appellate Controller of Estate Duty by the accountable person and that appeal was dismissed. The accountable person thereupon carried the matter further in appeal before the Tribunal and following the decision of the Gujarat High Court in Kantilal Trikamlal v. Controller of Estate Duty [1969] 74 ITR 353 (Guj) held that there was partition between the coparceners and when there is a partition between such coparceners, if one of the coparceners prefers not to receive his full legal share, then the difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from one species into another by any method. Under Explanation 2 to clause (15), the extinguishment at the expense of the deceased of a debt or other right shall be deemed to have been a disposition made by the deceased in favour of the person for whose benefit the debt or right was extinguished, and in relation to such a disposition the expression " property " shall include the benefit conferred by the extinguishment of the debt or right. In Kantilal Trikamlal v. Controller of Estate Duty [1969] 74 ITR 353 (Guj) a similar question came up before this High Court. In that case Trikamlal and his son, Kantilal, constituted a Hindu undivided family owning immovable properties and a share in two firms. On November 16, 1953, Trikamlal and Kan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther held that, in any event, under the instrument there was extinguishment at the expense of the deceased of his interest in the joint family properties and there was, therefore, a deemed disposition by the deceased of the benefit which accrued to Kantilal as a result of such extinguishment and the charge to estate duty was accordingly attracted under section 9(1) read with section 27(1). On a reference having been made to this High Court, it was held that the word " disposition " must possess the element of transfer of an interest in property from one person to another. No meaning of the word " disposition " can take in partition which is nothing but a process in and by which joint enjoyment is transformed into enjoyment in severalty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no joint family or no coparcenary between the deceased and his son, Chandulal. Under these circumstances, it is clear that this was a case of partition and hence in the light of the decision in Kantilal Trikamlal's case [1969] 74 ITR 353 (Guj), there was no question of this particular arrangement between the deceased and his son, Chandulal, being treated as a disposition for the purpose of section 27(1) and hence the amount of Rs. 2,04,078 cannot be said to be includible in the value of the estate of the deceased. In Commissioner of Gift-tax v. N. S. Getti Chettiar [1971] 82 ITR 599 (SC), the Supreme Court held that a partition between members of a Hindu undivided family did not effect any transfer as generally understood in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the property allotted to one of the widows in the joint family at the time of partition could be said to have passed on her death under section 7 of the Estate Duty Act or whether the arrangement under the partition deed was a disposition within the meaning of section 24. It was held that when the deceased died, her interest in the lands ceased and it passed to the other members of the former joint family and, prima facie, section 7 applied and it was merely an adjustment of rights of the various members of the family. The partition in the Hindu undivided family did not amount to a " disposition " within the meaning of section 24 and that section did not apply. At page 265 of the report the Supreme Court has considered its earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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