1986 (9) TMI 33 - HC - Income Tax

Court rules against widow in coparcenary property case; notional partition interpretation clarified

The High Court ruled against the accountable person, the deceased's widow, in a case involving the interpretation of notional partition in coparcenary ... Estate Duty, HUF Issues:Interpretation of notional partition in coparcenary property for estate duty calculation.Analysis:The case involved a reference made by the Appellate Tribunal regarding the assumption of a notional partition in coparcenary property before the death of the deceased for estate duty calculation. The deceased, late justice Harish Chandra, had one brother, Bishan Chandra, who predeceased him, leaving behind his widow. The deceased had one daughter who was married before his death. The accountable person, the deceased's widow, claimed that the deceased had only a one-fourth share in the coparcenary property, while the Revenue contended it was one-half. The Assistant Controller initially held that the deceased owned the entire property, passing it on to his wife. The appeal by the accountable person was dismissed, but the Appellate Tribunal later allowed it, leading to the reference to the High Court.The key contention was whether the accountable person was entitled to only one-fourth share based on notional partition. The accountable person relied on Explanation 1 to the proviso to section 6 of the Hindu Succession Act to support her claim. The High Court analyzed the provisions of the Hindu Succession Act and the Estate Duty Act regarding the devolution of coparcenary property and the concept of notional partition. It was established that a coparcenary must exist for notional partition to apply.The High Court emphasized that in this case, since the deceased and his brother had already partitioned the property, and the deceased had obtained his share before his death, there was no coparcenary at the time of his demise. Therefore, the concept of notional partition did not apply, and the accountable person could not claim a one-fourth share based on Explanation 1. The Court cited relevant case laws to support its interpretation and concluded that the accountable person was not entitled to a one-fourth share. The judgment was delivered against the assessee and in favor of the Revenue, denying the claim for a lesser share and upholding the assessment based on a one-half share.The High Court's decision clarified the legal principles governing coparcenary property, notional partition, and the devolution of interests under the Hindu Succession Act and the Estate Duty Act. The judgment provided a detailed analysis of the applicable provisions and case laws to determine the rightful share of the accountable person in the estate of the deceased.