S DEVARAJ Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) AS both the cases raise substantially the same points, they are dealt with together The first case is with reference to an assessment made under the Wealth-tax Act while the other is with reference to an assessment made under the Estate Duty Act. AS the questions involved in T.C. No. 49 of 1967 are more comprehensive, we take up that case first for considerationOne T. R. Narayanaswami Naidu was the karta of a joint Hindu family. The joint family properties included a building called "Nataraja Nilayam" constructed in the year 1942 at Palani. It had been set apart for use of pilgrims visiting the town and admittedly the said building was not used for any private purposes of the family. The family properties were partitioned under a partition deed dated March 1, 1950, between the said Narayanaswami Naidu and his adopted son, Rajasekaran, as also minor, Devarajan, the adopted son of his pre-deceased son. Under that partition the building in question was directed to be maintained by Narayanaswami Naidu with the income from certain lands over which he had been given a life-interest.

(2.) THE partition deed further provided that after the death of Narayanaswami Naidu, the building has to be maintained by his daughter-in-law, one Janaki Ammal, with the income from the same lands, and that after her death, Rajasekaran and Devarajan were to maintain the building with the income from the same lands. Subsequent to the partition deed, a family settlement deed was executed on February 5, 1958, under which Janaki Ammal was deprived of her right to manage the building and also her right with regard to the lands with the income of which the building has to be maintained, and instead it was provided that after the death of Narayanaswami Naidu the lands should be equally divided between Rajasekaran and Devarajan and enjoyed with absolute rights, subject to their liability to maintain the said "Nataraja Nilayam". Narayanaswami Naidu died on December 31, 1958. At the time of his death he was a partner in the firm of Messrs. T. R. Narayanaswami Naidu and Co., having a 3/16th share in the profits and losses of the said firm. That firm was the managing agent of one Coimbatore Pioneer Mills Ltd. On the date of his death, the deceased had a share capital of Rs. 1, 200 to his credit, and his share in the profit and interest amounted to Rs. 19, 233THE accountable persons filed an estate duty return admitting a net dutiable estate of Rs. 3, 66, 947.

(3.) THOUGH normally a Hindu while dedicating property to a deity or any other religious or charitable object ordinarily goes through the ceremonies of sankalpa and samarpan, it cannot be said that those ceremonies are essential to the creation of an endowment. The performance of these ceremonies is only relevant to show the intention of the grantor, and if there is clear and unequivocal manifestation of intention to create a trust and there is formal divestiture of the ownership in the property on the part of the donor with the intention to devote it to religious and charitable purpose the dedication must be deemed to be complete. The dedication of property is not a sacrament but a secular act but the mere renunciation of ownership by the donor with a particular object is sufficient to create an endowment. We are of the view that the Tribunal has not kept in mind these general and accepted principles while considering the question as to whether "Nataraja Nilayam" is a trust property or notThere was a subsequent litigation between Janaki Ammal, the daughter-in-law of the deceased, Rajasekaran, the adopted son of the deceased, and Devarajan, the adopted son of Janaki Ammal, wherein Janaki Ammal questioned, inter alia, the validity of the partition deed dated March 1, 1950, and in the course of the entire litigation the parties proceeded on the basis that the building "Nataraja Nilayam" was a trust property and the dispute between them was as to the right of management of the trust.