Judgment

SEN, J.:- This appeal on certificate under Section 65 (1) of the Estate Duty Act, 1953 (hereinafter referred to as the Act) arises from a judgment of the Allahabad High Court* delivered on a case stated under Section 64 of the Act by which the High Court answered two of the questions against the accountable person and in favour of the Controller of Estate Duty but the third in the negative, against the Controller of Estate Duty and in favour of the accountable person. We are not concerned with the first two questions, but only the third, which reads :

* Reported in 1971 Tax LR 1112.

"Assuming that the shares in dispute really belonged to Sri K. M. Mitra deceased, whether those shares in the circumstances of the case constituted property which passed on the death of Sri K. M. Mitra for the purposes of Sec. 5 of the Estate Duty Act".

2. The facts giving rise to the reference are these: The late Sri K. M. Mitra died on February 11, 1957 leaving a large and extensive estate. On his death his son Aloke Mitra, the accountable person, filed a return of estate duty valuing the estate of deceased at 3,75,235. This included 502 shares of Rs. 100/- each in Mitra Prakashan Pvt. Ltd. and 225 shares of Rs. 100/- in Maya Press Pvt. Ltd. held by the deceased. The Assistant Controller of Estate Duty did not accept this part of the return and included 2002 shares in Mitra Prakashan Pvt. Ltd. and 1602 shares in Maya Press Pvt. Ltd. standing in the name of Smt. N. Mitra, wife of the deceased, and his three sons, Aloke Mitra, Ashoke Mitra and Deepak Mitra, brother-in-law B. N. Ghosh and an ex-employee, R. N. Misra since they were holding these shares benami. He accordingly included the value of these shares in the principal value of the estate of the deceased. His order was affirmed in appeal by the Central Board of Direct Taxes, that is, the Appellate Tribunal. Under Sec. 64 (1) of the Act the Appellate Tribunal referred the question whether the shares allotted to the wife of the deceased as his nominee or as benamidar, were, as from the commencememt of the Hindu Succession Act, 1956 held by her as a full owner thereof by virtue of provisions of Section 14 of that Act.

3. According to the High Court, the said question did not at all arise. On the finding that the transaction was benami and that the deceased was the real owner of the shares, the wife must be held to have no interest or title to the shares. She was merely a benamidar or name-lender. Since she had no interest at all, the provisions of Section 14 of the Hindu Succession Act were not attracted as she was not possessed of any right or title.

4. The material facts of the case may now be stated. The deceased carried on the business of printer and publisher under the name and style of Maya Press. In 1953, his brother-in-law, B. N. Ghosh along with some other persons floated two companies, Mitra Prakashan Pvt. Ltd. and Maya Press Pvt. Ltd. Under an agreement dated May 29, 1953 the deceased agreed to transfer his publishing business to Mitra Prakashan Pvt. Ltd. for a consideration of Rs. 2,07,500 and the printing business to Maya Press Pvt. Ltd. for Rs. 1,64,800. It was agreed that the consideration would be paid by Mitra Prakashan Pvt. Ltd. in the form of cash to the extent of Rs. 7,500/- and the balance by allotting 2000 fully paid up shares of the value of Rs. 100/- each to the deceased or his nominees. The other company, namely Maya Press Pvt. Ltd. agreed to pay Rs. 4,800/- in cash and the balance of Rs. 1,60,000 in the form of 1600 fully paid up shares of the value of Rs. 100/- each to be allotted in the name of the deceased or his nominees. In pursuance of this agreement, the business of Maya Press was transferred by the deceased on July 1, 1953 to the two companies. On January 24, 1954 the deceased wrote to the two companies letters intimating that the shares be allotted to his wife Smt. N. Mitra, three sons Aloke Mitra, Ashoke Mitra, Deepak Mitra, brother-in-law B. N. Ghosh and a