R PARTHASARATHY Vs. CONTROLLER OF ESTATE-DUTY

JUDGEMENT

(1.) ONE Ramabadra Iyer died on October 14, 1962, and the proceedings relate to the assessment to estate duty of his dutiable estate. He and his paternal cousin, Kasivisvanatha Iyer, originally constituted an HUF. There was a partition as between them on April 5, 1959. After such partition, the HUF of which the deceased was the karta, consisted of himself, his wife, Parasakthi Ammal, and his minor son, R. Parthasarathy. The deceased had two daughters, Rama Devi Ammal and Nagaveni Ammal, both of whom were married. On July 25, 1959, the deceased executed a registered settlement deed by and under which he settled upon his wife, Parasakthi Ammal, and his two married daughters referred to above, lands set out in the Schedules 'A', 'B' and 'C', respectively, thereto to be taken by them absolutely. The schedules give various items of immovable properties and the value of the properties mentioned in each schedule is given as Rs. 10, 000. Pattas for these lands were also got transferred in the name of the respective donees. On January 22, 1960, a registered partition deed was entered into by the deceased and his wife acting as the guardian of the minor son, Parthasarathy, by and under which the properties described in the ' A' schedule thereto were allotted to the share of the deceased and the properties set out in 'B' schedule thereto and valued at Rs. l7, 350 were allotted to the share of the minor.

(2.) THE properties set out in 'A' schedule thereto included those which the deceased had already settled on his wife and two daughters under the settlement deed dated July 25, 1959. On his death on October 14, 1962, his widow filed an estate duty account in which the value of the properties settled by the deceased on her and the two daughters under the settlement deed dated July 25, 1959, was not included. It was contended before the Asst. CED that there was an oral partition between the deceased and his son by metes and bounds even prior to the settlement deed dated July 25, 1959, and the properties were settled only subsequently and those properties were allotted to the share of the deceased in the partition deed. THE Asst. CED did not accept the contention of the accountable person that there was a partition between the father and son even before July 25, 1959, and, therefore, on the date of the settlement, the settled properties belonged not to the joint family, but to the deceased alone. He held that the deceased and his minor son became divided only under the partition deed dated January 22, 1960, and consequently the gifts made prior thereto on July 25, 1959, were void and since those properties have been allotted to the share of the deceased under the partition deed dated January 22, 1960, they passed on his death under s.5. He, therefore, included Rs. 2, 96, 085 being the value of the said properties in the dutiable estate. He also estimated the income from such lands for the two years prior to the death of the deceased as Rs. 57, 000 and included the same under s.9 on the ground that the deceased must be deemed to have gifted the income therefrom to the donees, since he had allowed them to take the same in pursuance of void gifts Aggrieved by such assessment, the heirs preferred appeals to the Appellate CED.

(3.) THEREFORE, there can be no doubt whatever that the properties, the value of which was Rs. 20, 000 out of the properties valued at Rs. 57, 350, do not constitute a reasonable proportion at all. What the learned counsel for the accountable person contends is that we must add to the said sum of Rs. 57, 350 the value of movable properties which were divided between the father and the son even before the execution of the partition deed dated January 22, 1960. We are unable to entertain any such contention in this reference. A perusal of the orders of the Asst. CED, the Appellate Controller and the Tribunal as well as the grounds of appeal preferred before the Appellate Controller and before the Tribunal show that no such contention was put forward before the authorities and no argument was advanced that the immovable properties, the value of which was Rs. 20, 000 settled in favour of the two daughters, bore a reasonable proportion to the total assets of the joint family including the immovable properties the value of which was Rs. 57, 350 and the movable properties. As a matter of fact, there is no reference to the value of any such movable property in the grounds of appeal before the two authorities below or in the arguments advanced before the authorities. Even the accountable person proceeded only on the basis that the reasonableness or otherwise of the proportion has to be tested only with reference to the total value of the immovable property of the family. In such a context, we cannot hold that any such argument now sought to be advanced before us arises out of the order of the Tribunal in order to enable us to countenance the sameThe second contention put forward by the learned counsel for the accountable person is that if the gifts in favour of the three persons were void, the result of that will be that the properties which are the subject-matter of the settlement deed reverted to the HUF and consequently what passes on the death of the deceased is only his interest in the property and not the value of the entire properties. We are of the opinion that this argument is misconceived. We have already referred to the fact that in the partition deed dated January 22, 1960, the properties which are the subject-matter of the settlement deed dated July 25, 1959, were allotted to the share of the deceased. As we pointed out already, there were certain artificial and laboured recitals in the partition deed and one such recital being that such an arrangement was contemplated even at the time of the settlement deed. Whatever it may be there is no dispute that under the partition deed, the properties which are the subject-matter of the settlement deed were allotted to the share of the deceased. If so, with effect from January 22, 1960, there was no joint family in existence and the properties settled on July 25, 1959, belonged only to the deceased and since there was no joint family, it could not have belonged to a non-existent joint family.