CONTROLLER OF ESTATE DUTY Vs. BASANTI BAI LATE

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated March 1, 1981, under Section 64(1) of the Estate Duty Act, 1953 :

(2.) THE brief facts of the case are that the deceased lady was the widow of one Panthoo Lal, who died in 1928. On the death of her husband, the property passed to her. In the year 1942, she had adopted Gulab Chand as her son. Gulab Chand got married and he had four children. THE deceased expired on July 9, 1977. In the estate duty proceedings a question arose as to what properties and to what extent had passed on her death. THE accountable persons claimed that the deceased was not entitled to any share in the Hindu undivided family property and the entire property was of the Hindu undivided family. It was submitted that she was neither a coparcener of her husband nor was she a coparcener of her adopted son, Gulab Chand, and, therefore, no property passed on her death so as to attract the provisions of the Estate Duty Act. THE Assistant Controller of Estate Duty negatived the contention of the accountable person and came to the conclusion that on the death of Panthoo Lal, the deceased, Basanti Bai, became an absolute owner of the property left by her husband and in accordance with the provisions of Section 14 of the Hindu Succession Act, 1956, any property possessed by a female Hindu whether acquired before or after the commencement of that Act has to be considered to be in the full ownership of the deceased. On the basis of adoption of Gulab Chand in 1942 it was held that the Hindu undivided family revived and, therefore, the share of Smt. Basanti Bai was diminished to 1/2 of the entire family properties.

(3.) WE have considered the matter. It is not in dispute that the property of the deceased, Panthoo Lal, was Hindu undivided family property. A female, under Mitakshara law, cannot become a coparcener nor can she become a karta or manager of the Hindu undivided family. The point which has to be seen is whether on the death of her husband, when she became full owner of the property whether on adoption of Gulab Chand, the deceased, Basanti Bai, had any interest or share in the property. It is an established proposition of law that on adoption by a Hindu widow the adopted son acquires also the right of an aurasa son and those rights relate back to the date of death of the husband. As held by the apex court in the case of Srinivas Krishnarao Kango v. Narayan Devji Kango, AIR 1954 SC 379, the estate held by the widow which is a defensible estate in accordance with the provisions of Section 12 of the Hindu Adoptions and Maintenance Act, 1956, the adopted child shall not divest any person of any estate which has been vested in him/her before the adoption. In Smt. Dhani Devi and Jhavermal v. CED [1973] 89 ITR 96, it was held by this court that by a legal fiction an adopted son is like a posthumous son who is deemed to have come into existence before the death of the adoptive father so that there is no break in the continuity of the line. Therefore, at the time of the death of the deceased, the joint family will be deemed to have consisted of the deceased person, his adopted son, and his wife. The wife could not have claimed partition, only the father and son could have claimed it and she could have claimed a share in the partition. In the case of Krishnamurthi Vasudeorao Deshpande v. Dhruwaraj, AIR 1962 SC 59, the case of Srinivas Krishnarao Kango, AIR 1954 SC 379 was considered and the following principles were deduced from the said judgment (at page 61) ;