NARAYANACHARYULU M S Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THE Central Board of Direct Taxes has referred the following question for our decision, viz.:

(2.) IT appears from the statement of the case that the deceased, M.N. Narasimhacharyulu, died on May 3, 1955, leaving behind him his four sons, with whom during his lifetime he constituted a Hindu undivided family of which he was the karta. The eldest son, Narayanacharyulu, who is the applicant, is the accountable person. IT is the case of the applicant that the properties of which the deceased died possessed belonged to the Hindu undivided family and that he had only a 1/5th interest therein, on which alone the estate duty is leviable. The Assistant Controller of Estate Duty found that the deceased was the adopted son of one Sri M. Venkata Narasimhacharyulu who died in 1896, leaving a will dated February 21, 1896, that all the properties specified in the will, with the exception of four items were described by the testator as his self-acquisitions, that the properties so described were inherited by the deceased under the will of his father in his individual capacity and that there was no evidence to show that the deceased had, during his lifetime, relinquished his separate rights over those properties in favour of the family. Accordingly, the Assistant Controller determined the principal value of the estate of the deceased at Rs. 3,13,895 comprising,--

(3.) IT would appear from the will, annexure "C", to the statement of the case that Madabusi Venkatacharyulu had become divided from his brothers in the year Kshaya (about 1867) and, therefore, recited that his gnatis had no concern with regard to his property. He then recited about taking in adoption the deceased and stated that he had written a separate list of his existing movable and immovable property and signed therein which, apart from his ancestral properties, viz., the Tripurapuram Agraharam, Julakallu Inam, Kancharagottipadu Inam and vacant sites at Nuzvid, consisted of movable and immovable properties acquired by him alone. With respect to his entire properties, he appointed certain executors named therein with a direction that they should assume position and manage the same and improve it. He gave certain further directions to them, which, apart from certain bequests, were that when his adopted son emerges from minority, they should, when handing over the estate to him, see that there is no breach with regard to the bequests, mentioned in paragraph 6 of will, namely, payment of a sum of Rs, 20 per month to his first younger brothers son, Lakshmi Narasimhacharyulu, etc. IT was further stated that the estate will be handed over only if the executors were satisfied that the adopted son was able to manage the estate properly and with dignity ; otherwise, the executors will retain the estate and will pay him such amounts befitting his family conditions. If for any reason before the estate is handed over to his adopted son there was any act of providence which renders the above direction impossible, the whole of the estate shall be utilised for proper charity approved by Hindu Shastras. Again, he stated: