Estate duty on coparcenary partition: a relinquishment reducing the deceased's share can qualify as a deemed disposition under the Act.

For estate duty purposes, a bona fide partition or relinquishment by a Hindu coparcener made within two years of death, where he takes less than his due share and another coparcener's share is enlarged, can amount to a deemed disposition. Explanation 2 to section 2(15) of the Estate Duty Act, 1953 extends "property" by legal fiction to include an extinguishment of the deceased's right at his expense in favour of another person. Sections 5, 9 and 27 reinforce that such a disposition may be treated as property passing on death and may attract estate duty even without a conventional transfer.

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Issues: Whether a partition or relinquishment by a coparcener, made within two years before death and resulting in his taking less than his due share while benefiting a near relative, constitutes a "disposition" and "property" within Explanation 2 to section 2(15) of the Estate Duty Act, 1953, so as to attract estate duty under sections 5, 9 and 27.

Analysis: The statutory scheme treated estate duty as chargeable on property passing on death, and the inclusive definition of "property" in section 2(15), especially Explanation 2, extended the concept by legal fiction to the extinguishment at the expense of the deceased of a debt or other right in favour of another person. The provisions in sections 9 and 27 reinforced that a disposition by the deceased in favour of a relative, or property taken under such a disposition within the statutory period, could be treated as a gift or as property passing on death. The Court held that, in the context of a Hindu coparcenary, a bona fide partition or relinquishment resulting in the deceased accepting substantially less than his entitlement and thereby enlarging the share of the other coparcener falls within the extended meaning of "disposition" under the Act. The broader language of the Estate Duty Act was distinguished from the Gift Tax Act, and earlier authorities limiting "disposition" to a strict transfer were held not to control the present statutory setting.

Conclusion: Such a partition or relinquishment is within the scope of Explanation 2 to section 2(15) and is capable of attracting estate duty under sections 5, 9 and 27 of the Estate Duty Act, 1953.

Ratio Decidendi: For estate duty purposes, an extinguishment of a coparcener's right at his expense, resulting in a corresponding benefit to another person, is a deemed disposition even without a conventional transfer of property.

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