Dr. B.P. Saraf, J.
1. By this reference under section 64(1) of the Estate Duty Act, 1953, the Income-tax Appellate Tribunal, Nagpur Bench, Nagpur, has referred the following question for our opinion :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in upholding the order of the Appellate Controller holding that only that half share of the property of the deceased passed on the death of the deceased ?'
2. The facts giving rise to this reference are as follows : The deceased was the sole surviving coparcener of a joint Hindu family comprising himself and his wife. On his death, his widow who was the accountable person claimed that, under section 39 of the Estate Duty Act, 1953, the interest of the deceased in the Hindu undivided family property would be one-half only. The Assistant Controller of Estate Duty did not accept this contention and treated the full value of the property as having passed on the death of the deceased and taxed the value thereof in the hands of the accountable person. On appeal, the Appellate Controller of Estate Duty reversed the order of the Assistant Controller and held that the accountable person should not have been taxed in respect of the full value of the property of the Hindu undivided family which consisted of the deceased and his wife. The decision of the Appellate Controller was affirmed by the Tribunal. Hence, this reference at the instance of the Revenue.
3. The contention of learned counsel for the Revenue is that, as the deceased was the only male member and, as such, the sole coparcener of the Hindu joint family, section 39(1) of the Estate Duty Act, 1953, will have no application even though the family comprised the deceased and his wife. This contention is based on the ground that the wife of the deceased, even though she was a member of the joint family, had no right to claim partition. Her right was restricted. She was only entitled to get a share in the event of a partition. Till such partition took place, the male member or the sole coparcener remained the full owner of the property. Based on this notion of the law, it is contended that on the death of the deceased who was the sole coparcener, the whole of the joint family property passed to his successor and not only the half share of it. In other words, according to the Revenue, section 39(1) does not apply to a Hindu joint family comprising of one coparcener and a female member. This contention is strongly opposed by the assessee as being contrary to the clear language of section 39(1) of the Act - its intent and purport. It is, therefore, necessary to set out section 39(1) of the Estate Duty Act which is in the following terms :
'The value of the benefit accruing or raising from the cesser of a coparcenary interest in any joint family property governed by the Mitakshra school of Hindu law which ceases on the death of a member thereof shall be the principal value of the share in the joint family property which would have been allotted to the deceased had there been a partition immediately before his death.'
4. From a reading of the aforesaid provision in section 39(1), it is clear that, on the death of a member of a Hindu undivided family, for the purpose of estate duty, only the principal value of the share of the deceased in such joint Hindu family property which would have been allotted to him, had there been a partition immediately before his death, would be taken to be the value of his interest in the joint family property ceasing on death.
5. In the instant case, factually, there is no dispute that there was a joint Hindu family consisting of the deceased and his wife. The deceased was the sole coparcener and his wife a member of the said Hindu undivided family. Each one of them had an equal interest in the properties of the said joint family. In the event of partition, the deceased would have been entitled only to one-half of the property as his share. If that be so, section 39(1) would be clearly attracted and, on the death of the deceased, only a half share of the family property would be deemed to pass. The Assistant Controller of Estate Duty does not appear to be correct in taking the view that though there might be a Hindu undivided family consisting of the deceased and his wife, on the death of the deceased, the whole property will pass. He also does not appear to be right in holding that there cannot be a valid partition between a single male coparcener and his wife. There is not dispute in regard to the legal proposition that, in a joint Hindu family, the wife who is a member is entitled to get a share as and when a partition is effected. The only restriction is that she herself is not entitled to claim a partition. But, in the event of a partition taking place, she cannot be denied her share. If that be so, it is not understandable how section 39(1) will not be attracted. Section 39(1) visualises a deemed partition immediately before the death of the deceased and determination of the share of the deceased consequent to such partition. It is the share of the deceased determined in such manner which will be taken as his interest in the joint family property that ceased on his death. The Appellate Controller of Estate Duty, therefore, seems to be correct in holding that only a half share of the joint family property could be included in the estate of the deceased. The Tribunal was justified in upholding this view.
6. This view of ours gets full support from a number of decisions of the Supreme Court. We may refer to some of them. First, we may refer to the decision in the case of N. C. Narendranath v. CWT : [1969]74ITR190(SC) . In this case, the Supreme Court had occasion to examine the question as to whether the status of the assessee who was the appellant before the court was that of a Hindu undivided family consisting of himself, his wife and his daughters. The Supreme Court held that there was no warrant for the contention that there must be at least two male members to form a Hindu undivided family as a taxable unit. The expression, 'Hindu Undivided Family' in the Wealth-tax Act, is used in the sense in which a Hindu joint family is understood in the personal laws of Hindus. Under the Hindu system of law, a joint family may consist of a single male member, wife and daughters and there is nothing in the scheme of the Wealth-tax Act to suggest that a Hindu undivided family as an assessable unit must consist of at least two male members.
7. Next is the decision in the case of C. Krishna Prasad v. CIT : [1974]97ITR493(SC) . The question for consideration before the Supreme court in this case was as to whether an unmarried male member of a joint family, on partition of the joint Hindu family, can be assessed in the status of a Hindu undivided family even though no other person besides him is a member of the alleged family. The Supreme Court held that assessment in the status of a Hindu undivided family can be made only when there are two or more members of the Hindu undivided family. This decision which was in a case under the Income-tax Act, 1961, contains an elaborate discussion on the law relating to Hindu undivided families. In this decision also, the Supreme Court, referring to the provisions of the Income-tax Act, clearly observed that the expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the various schools of Hindu law. The plea that there must be at least two male members of a Hindu undivided family was negatived in this case also and it was held that, to constitute a Hindu undivided family, it is enough that there are two or more members of the Hindu undivided family. What was negatived was the claim of the assessee that there can be a Hindu undivided family consisting of a single member - male or female.
8. Reference may also be made in this connection to the decision of the Supreme Court in Gurupad Khandappa, Magdum v. Hirabai Khandappa Magdum : [1981]129ITR440(SC) . In this case, the Supreme Court was concerned with the share of heirs in coparcenary property on the death of a coparcener and, in that context, the effect of Explanation 1 to section 6 of the Hindu Succession Act, 1956. Section 6 of the Hindu Succession Act deals with the devolution of the interest which a male Hindu held in a Mitakshara coparcenary property at the time of his death. The proviso thereto contains the formula for fixing the share of the claimant. Explanation 1 provides that, for the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him, if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not. Dealing with the explanation, the Supreme Court observed (at page 447) :
'Explanation 1 to section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener 'shall be deemed to be' the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased. The allotment of this share is not a processual step devised merely for the purpose of working out some other conclusion. It has to be treated and accepted as a concrete reality, something that cannot be recalled just as a share allotted to a coparcener in an actual partition cannot generally be recalled. The inevitable corollary of this position is that the heir will get his or her share in the interest which the deceased had in the coparcenary property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition.'
9. The Supreme Court further observed that the aforesaid interpretation will further the legislative intent in regard to the enlargement of the share of the female heirs, qualitatively and quantitatively. It observed (at page 448) :
'The Full Bench of the Bombay High Court in Sushilabai, : AIR1975Bom257 , has considered exhaustively the various decisions bearing on the point and we endorse the analysis contained in the judgment of Kantawala C.J., who has spoken for the Bench.'
10. It may be noticed that Explanation 1 to section 6 of the Hindu Succession Act in more or less identical to section 39(1) of the Estate Duty Act, 1953, which also deals with a deemed partition for the purpose of determining the share of the deceased in the Hindu joint family property. There is no reason why the ratio of the aforesaid decision of the Supreme Court should not apply to the interpretation of section 39(1) of the Estate Duty Act.
11. We may also refer to another decision of the Supreme Court in CED v. Alladi Kuppuswamy : [1977]108ITR439(SC) , where the Supreme Court considered the ambit and scope of sub-section (1) of section 39 of the Estate Duty Act itself. In this case, the Revenue included a certain amount in the estate of the deceased, Smt. Alladi, on the footing that she was a member of the Hindu coparcenary. Her interest in the Hindu undivided family property passed on her death to her three sons and the value of this interest being one-fourth, the heirs would be liable to pay estate duty on the value of the one-fourth share of the joint Hindu family property. There arose a controversy as to whether the interest acquired by the deceased widow under the Hindu Women's Rights to Property Act, 1937, can be said to be a coparcenary interest in the legal sense of the term. While examining this controversy, the Supreme Court clearly observed that once a Hindu widow is held to have a coparcenary interest, then there would be no difficulty in treating her as a member of the Hindu coparcenary in which case, her interest could be easily valued according to the relevant provision of section 39 of the Estate Duty Act. Under section 39 of the Act, as observed earlier, the value of the benefit accruing or arising from the cesser of her coparcenary interest has to be determined by taking the principal value of the share in the joint family which would have been allotted to her, had there been a partition immediately before her death.
12. This decision of the Supreme Court (Alladi Kuppuswamy : [1977]108ITR439(SC) ), is also an authority for the proposition that a Hindu woman who is a member of a Hindu joint family has a share in the family property which ceases on her death. It is evident from the following observations (at page 452 of Alladi Kuppuswamy : [1977]108ITR439(SC) ) :
'By virtue of the provisions of the Act of 1937, a Hindu widow undoubtedly possesses a coparcenary interest as contemplated by section 7(1) (Estate Duty Act) of the Act and she is also a member of a Hindu coparcenary as envisaged by section 7(2) of the Act. On the death of Smt. Alladi, therefore, there was clearly a cesser of her interest and her interest merged in the coparcenary property and by reason of the inclusive part of sub-section (1) of section 7, it must be taken to have passed on her death and was hence exigible to estate duty. Since Smt. Alladi was a member of the coparcenary, this interest of hers which passed on her death was liable to be valued in accordance with the method provided by section 39 of the (Estate Duty) Act.'
13. In our opinion, this decision is directly on the point though the factual situation is the converse of that in the case before us. In the case before the Supreme Court, the widow who was a member of the Hindu undivided family had died and the question was regarding determination of her interest in the family property by the application of section 39 of the Estate Duty Act. Here, in the case before us, it is the sole coparcener who died and it is his share that has to be determined. For that purpose, it is relevant to know as to what was the share of the surviving wife in the joint Hindu family of which she was a member along with her husband. That is what has been decided by the Supreme Court in the aforesaid case. In the event of any partition, actual or deemed, she had equal interest with that of the other members of the family and if that is so, the interest of the deceased in the family property by the application of section 39 of the Estate Duty Act naturally will be only half.
14. Counsel for the Revenue placed reliance of a Full Bench decision of the Madhya Pradesh High Court in Ramratan v. CED : [1983]142ITR863(MP) . In this case, it was held (at page 866) :
'The ownership in the property obtained by the deceased on partition was not shared by his wife although the deceased and his wife constituted a Hindu undivided family. The deceased had no son. There was thus no coparcener in his family excepting himself. The deceased was the sole coparcener in his family. Speaking generally, female members in a Hindu undivided family have no ownership in the property belonging to the family. The ownership of such a property is held a smaller body which is called the coparcenary and in case there is only one coparcener, it is he alone who owns the entire property. It is true that the for purposes of assessment of income-tax, the status of the deceased was that of a Hindu undivided family as he and his wife constituted a family but different considerations prevail for finding out as to whether the entire property of the family or a share in it passed on the death of the deceased. As the entire ownership in the property vested in the deceased and as no part of it was shared by the wife who was the only other member in the family, the entire property passed on the death of the deceased within the meaning of section 5 of the Act. The deceased being the sole coparcener had disposing power under the Hindu law in respect of the entire property and even under section 6 of the Act, the entire property would be deemed to have passed on his death for purposes of estate duty. Section 7 which applies when a coparcenary interest in a joint family property ceases on death and section 39(1), which lays down the mode of valuation of such interest, can apply only when the joint family property is vested in more than on person. It is only then that an interest in the joint family property ceases on the death of a coparcener and the valuation of such an interest has to be ascertained on the basis of the principal value of the share which would have been allotted to the deceased had there been partition immediately before his death. When the entire property vested in the deceased because the deceased was the sole coparcener, there is no question of any other person getting any interest or share on a notional division immediately before his death and sections 7 and 39 have no application to such a case. As earlier stated, the whole of the property in such cases passes under section 5 read with section 6.'
15. Reference was also made to another decision of the same court in CED v. Smt. Rani Bahu : [1983]142ITR843(MP) . The Allahabad decision in CED v. Kalawati Devi (Smt.) : [1980]125ITR762(All) was also referred to, particularly, the following passage (headnote) :
'The assets that are received on partition by a member of a Hindu undivided family, who has no male issue at the time belongs to him absolutely although they are capable of being owned by a Hindu undivided family, consisting of him and his son or sons that may be born or adopted subsequently.'
16. It may be expedient to briefly state the facts of this case. R whose family considered of himself, his wife and daughter received certain properties on the partition of a bigger Hindu undivided family. On the death of R, in connection with the estate duty assessment, his widow who was the accountable person claimed that, in the Hindu undivided family properties, her husband had a one-third share which alone passed on his death to herself and her daughter. This plea was repelled by the Assistant Controller. The decision of the Assistant Controller was affirmed by the Appellate Controller. However, on appeal, it was reversed by the Tribunal, coparcener in the family - it would not mean that the character of the property underwent any change. It could not be said that the deceased was an absolute owner. His right was only to the extent of one-third and the same was liable to be included in his estate for the purpose of estate duty. The Allahabad High Court held that the deceased R was the absolute and exclusive owner of the property and that the entire property passed on his death.
17. We have carefully gone through these decisions of the Full Bench of the Madhya Pradesh High Court and the decision of the Division Bench of the Allahabad High court. We find it difficult to agree with the views expressed therein which, in our opinion, are not in consonance with the ratio of the decisions of the Supreme Court in N. V. Narendranath v. CWT : [1969]74ITR190(SC) ; Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum : [1981]129ITR440(SC) ; CED v. Alladi Kuppuswamy : [1977]108ITR439(SC) . We may also refer, in this connection, to a decision of the Andhra Pradesh High Court in Prem Chand v. CIT : [1984]148ITR440(AP) . In this case, applying the ratio of the decision of the Supreme Court in N. V. Narendranath v. CWT : [1969]74ITR190(SC) , it was held that a karta and his wife were assessable as a Hindu undivided family. The legal position in regard to the Hindu undivided family property was summarised as follows (at page 447) :
'Where the property 'was originally' owned by coparceners of a Hindu undivided family and later devolved on a sole surviving coparcener who had female members in his family, the character of the property as Hindu undivided family does not change in spite of the temporary reduction of the number of coparceners, and the sole surviving coparcener has to be assessed as a Hindu undivided family as in Gowli Buddanna's case : [1966]60ITR293(SC) . Similarly, where the property of a Hindu undivided family is partitioned, the property so allocated to a single coparcener who has female members in the family has to be assessed as Hindu undivided family, on the principle of Gowli Buddanna's case as applied in Narendranath's case : [1969]74ITR190(SC) .'
18. On a careful consideration of the various of the Supreme court and the High Court referred to above, we are of the clear opinion that there can be a Hindu joint family consisting of a sole coparcener and his wife. That being so, in the event of the death of any one of them, for computing the interest of the deceased in the family property, section 39 of the Estate Duty Act would apply and only that portion of the property which would have fallen to the share of the deceased in the event of a partition of the family taking place immediately before the death would be deemed to be the interest of the deceased in the joint family property. That being so, in the instant case, the Tribunal was right in holding that only a half share in the property of the deceased passed on his death.
19. The question referred to us, therefore, is answered in the affirmative and in favour of the accountable person and against the Revenue.