Controller of Estate Duty vs Smt. Ginni Devi Jain

G.C. Bharuka, J.—The present reference is one u/s 64(1) of the Estate Duty Act, 1953 (hereinafter in short, "the Act" only). The questions of law involved are as below :

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that only half of the Hindu undivided family property passed on the death of the deceased ?

(2) Whether, on the facts and in the circumstances of the case, the deceased sole surviving coparcener having absolute power of disposition of the Hindu undivided family property a notional partition of the said property should be presumed to have been effected u/s 39(1) of the Estate Duty Act ?

(3) Whether, on the facts and in the circumstances of the case, the entire Hindu undivided family property passed on the date of death of the deceased ?"

The foundational facts lie in a short compass. Smt. Ginni Devi Jain, the accountable person, is the wife of the late Bhagchand Jain, who expired on October 25, 1976. The deceased was the sole surviving coparcener of a Hindu undivided family consisting of himself and his wife. The couple had no issue. There were ancestral properties. Smt. Ginni Devi, basing her claim u/s 39(1) of the Act, claimed that only half of the share in the property has passed on his death, which can be subjected to duty under the Act, since keeping in view the notional partition immediately before the death of the deceased she was entitled to a half share in the property. The claim, though rejected by the Assistant Controller and the Appellate Controller, was upheld by the Tribunal.

Section 39(1) of the Act reads as under :

"39. Valuation of interest in coparcenary property ceasing on death.--(1) The value of the benefit accruing or arising from the cesser of a coparcenary interest in any joint family property governed by the Mitakshara school of Hindu law which ceases on the death of a member thereof shall be the principal value of the share in the joint family property which would have been allotted to the deceased had there been a partition immediately before his death."

On the basis of the aforesaid provision, what needs to be determined is as to what would have been the interest of the deceased in the ancestral properties that would have been allotted to him had there been a partition immediately before his death. The answer to the question is dependent on whether there can at all be a partition in respect of the ancestral properties where the family consists of the sole surviving coparcener and his wife. In Mulla''s Principles of Hindu Law, 16th edition, at page 248, it has been said that the share which a coparcener obtains on partition of ancestral property is ancestral property as regards his male issue, who take an interest in it by birth, whether they are in existence at the time of partition or are born subsequently. But as regards other relations, it is separate property, and if the coparcener dies without leaving any male issue, it passes to his heirs by succession.

This court in the case of HANUMANMAL PERIWAL Vs. COMMISSIONER OF WEALTH-TAX, BIHAR and ORISSA., , has held that the assets that are received on partition by a member of a Hindu undivided family, who has no male issue at that time can be said to belong to him absolutely, although they are capable of being owned by a Hindu undivided family consisting of him and his son or sons that may be born or adopted subsequently.

It is also well established that, in respect of ancestral properties, there can be a partition only between two surviving coparceners subject to the provisions contained in the Hindu Succession Act, 1956, conferring special rights which are not relevant for the present purpose. Therefore, even immediately before the death of the deceased, no partition was permissible between the deceased and his wife, Ginni Devi. It is well-settled that, in a case like the present one, neither the wife can have any share nor could she sue for any share and, therefore, on the death of the sole surviving coparcener of a Hindu undivided family, the entire interest in the Hindu undivided family property passes to his heir. (See Smt. Rajni Bhargava Vs. Controller of Estate Duty, and Controller of Estate Duty Vs. Smt. Kalawati Devi, ).

In the result, questions Nos. 1 and 2 are answered in the negative and question No. 3 is answered in the affirmative and thereby all the questions are answered in favour of the Department. However, there shall be no order as to costs.

Let a copy of this judgment be sent to the Income Tax Appellate Tribunal for passing a consequential order.

S.K. Chattopadhyaya, J.

I agree.