1977 Supreme(MP) 198

IN THE HIGH COURT OF MADHYA PRADESH
C. KONDAIAH, G.L. OZA, JJ.
Ramkunwar Bai - Applicant
Versus
Controller of Estate Duty Bhopal - Non-Applicant
M.C.C. No. 137 of 1976 (J)
Decided On : 03-08-1977

Headnote:(1) Estate Duty Act, 1953 - S. 10 & 12 - deceased assessee entrusted the disputed amount to a trust - but the amount remained in the custody and care of the deceased himself and he utilised the amount - section 10 and not section 12 of the Act attracted - amount included in the estate of the deceased as property passed or deemed to pass on his death.

       (2) Hindu Law - Joint Hindu Family - A male member along with his wife - can constitute a Hindu Joint family.

       (3) Estate Duty Act, 1953 - S. 10 - Joint Hindu family consisting of husband and his wife - husband dies - only the share of the husband which is half of the whole property passes.

       Short Note

       1. It was a reference under section 64 of the Estate Duty Act made by the Appellate Tribunal Indore and had referred the following two questions : -

       (I) Whether on the facts and in the circumstances of the case the amount of Rs. 82,000/ - was correctly included in the estate of the deceased as property passing or deemed to pass on his death under section 10 of the Estate Duty Act.

       (2) Whether on the facts and in the circumstances of the case, the entire coparcenary interest of the deceased in the coparcenary property passed on his death.

       2. As regards the first question i.e. the amount or Rs. 82,000/ - which was entrusted to a trust of which the deceased himself was managing truatee, it is Dot disputed that this amount of Rs. 82,000/ - remained in the custody and care of the deceased himself and it was he who was utilising this amount. It is found by the Tribunal as a fact that out of Rs.3,50,000 given away to the trust a sum of Rs. 82,000/ - was utilised by the deceased assessee in his money lending business and on this he earned interest but no part of the interest so earned was credited to the account of the trust and, therefore, it is found as a fact that so for as the amount Rs. 82,000/ - is concerned beneficial enjoyment of this amount remained with the deceased and the deceased was not exclude from the possession and enjoyment of this amount of the trust funds. Section 10 of the Estate Duty Act has laid down two tests, firstly that the donor must give such possession of the gifted property as the property is capable of, and secondly, that he must not retain any baleen for himself by contract some such other obligation. Applying these two tests in the present case it could not be doubted that the second test if applied goes against Smt. Ramkumar Bai (accountable person being the wife of the deceased assessee), as the donor retained the benefit for himself from the sums i.e. Rs 82,000./ - found by the Tribunal In the light of this, it could not be doubted that the Tribunal rightly applied section 10 of the Act. Hence the answer to the first question is In the affirmative that a sum of Rs. 82,000/ - was correctly included in the estate of the deceased as property passing or deemed to pass on his death. Commissioner of Income - tax and Controller of Estate Duty, Madras v. N.R. Ramarathnam and others, (1973) 91 ITR 1, Controller of Estate Duty, Madras v. C.R. Ramchandra Gounder, (1973) 88 ITR 448 relied on. Controller of Estate Duty v. Thanwar Dass, (1974) 94 ITR page 101 referred to.

       3. As regards the second question, it cannot be doubted that a male member along with his wife could also constitute a Hindu joint family. Consequently in the opinion of this Court the Tribunal was wrong in holding that the entire coparcenary property passed on his death. In fact the property vested in Joint Hindu family consisting of deceased and his wife and on the death of the deceased it is only his share which passed on and therefore, the answer to the second question is in negative. It is only the deceased’s share in the hint Hindu family which who admittedly half, will be the property which passed on his death. C. Krishna Prasad v. Commissioner of Income - tax Banglore, (1974) 97 ITR page 493, Controller of Estate Duty v. Thanwar Dass. (1974) 94 ITR 101 relied on. Kalvani Vithal Dass and others v. Commissioner of Income tax Bengal, (1937) 5 ITR 90 referred to. Reference answered accordingly.