MANOHAR VITHAL VELANKIWAR Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE following two questions have been referred to us by the Central Board of Direct Taxes under sub -section (1) of section 65 of the Estate Duty Act, 1953 (34 of 1953), hereinafter referred to as the Act : '(1) Whether, on the facts and in the circumstances of the case, the deceased was the owner of the entire property valued at Rs. 2,47,79 ? (2) If the answer to question No. 1 is in the affirmative then, whether the assets owned by the deceased were subject to a charge of maintenance of his wife and whether the Assistant Controller should have made any allowable in respect of the such a charge ?'

(2.) THESE two questions arise thus. Deceased Vithal Ganesh Velankiwar was a karta of a joint Hindu family consisting of his wife, Girjabai, and his three sons, Pandurang, Manohar and Sudhakar. There was a partition in the family on 4th September, 1947, as a result of which one of the sons, Pandurang Ganesh Velankiwar, separated from the family under a deed of partition after taking his 1/5th share which was valued at Rs. 35,000. Subsequently, on 18th November, 1953, the second son, Manohar, also separated from the family under a deed of partition by taking his share in the joint family property valued at Rs. 35,000, and on 8th November, 1954, the third son, Sudhakar, also separated from the family under a deed described as a deed of relinquishment. To this last deed, only Sudhakar and deceased Vithal have been shown as parties. The deed shows that the property was divided into three shares and 1/3 share was taken by Sudhakar who, on taking his share, relinquished his interest in the remaining property. A notice under the Act was issued to Manohar who, according to the revenue, was the accountable person within the meaning of the Act. It was contended on behalf of Manohar that after separation of the three sons by taking away their respective shares in the joint family property, the remaining property belonged to the deceased Vithal and his wife, Girjabai. Thus, the property that passed on the death of Vithal was only a half share in the property that remained after separation of three sons. This contention was overruled by the Assistant Controller of Estate Duty. He held that, since all the other coparceners had separated from the family, the deceased held the remaining property of the joint family in the capacity of a sole surviving coparcener. As such he held that the entire value of the property was chargeable to estate duty. Against this order of the Assistant Controller an appeal was preferred before the Central Board of Revenue. In this appeal it was contended that it should have been held that there was a partition in the family and the property that remained after execution of the deed dated 8th November, 1954, was the property belonging to the deceased and his wife in equal shares as tenants -in -common. In the alternative, it was contended that at any rate the assets owned by the deceased were subject to a charge of maintenance of his wife, Girjabai, and that maintenance charge ought to have been taken into account and allowance given therefor. Both these contentions were overruled by the Central Board, and the appeal was dismissed.

(3.) MR . Thakkar, learned counsel appearing for Manohar, contends that the Board erred in holding that deceased Vithal alone was the owner of the property that was left after the three sons had separated and had taken away their respective shares. It is his argument that on partition between the sons and the father, the mother has a right to claim partition and have a share in the property equal to the share of a son. Thus, on separation of the three sons, Pandurang, Manohar and Sudhakar from the deceased Vithal, Girjabai had a right to claim partition and have a share equal to that of a son. The family consisted of the deceased Vithal, his wife, Girjabai, and three sons, Pandurang, Manohar and Sudhakar. Pandurang and Manohar had taken 1/5th share each in the total property. Even the last deed dated 8th November, 1954, under which Sudhakar separated, shows that the property was divided into three shares, one share was given to Sudhakar and the remaining 2/3rd share thus was held jointly by Vithal and Girjabai as tenants -in -common. Thus, on the separation of the third son, Sudhakar, on 8th November, 1954, Vithal was the owner of half share only of the property and the other half belonged to Girjabai. The property left by Vithal on his death was to the extent of half share only in the said property. The Board was in error in holding that Vithal was the owner of the entire remaining property.