Severance in status under a partition agreement prevents estate duty aggregation of the deceased's share in remaining properties.

A partition agreement that divided business capital separately, left other properties joint only for convenience, and required equal sharing of income and losses with separate accounts was treated as effecting severance in status from its date. The remaining movable and immovable properties were therefore held not as continuing joint family property but as assets held by tenants-in-common. On that basis, the deceased's share in those properties was not liable to aggregation under Section 34(1)(c) of the Estate Duty Act, and aggregation was not justified.

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Issues: Whether the deceased's share in the family properties was liable to be aggregated under Section 34(1)(c) of the Estate Duty Act, or whether the partition agreement had brought about a severance in status so that the members thereafter held the remaining properties as tenants-in-common.

Analysis: The partition agreement showed that the business capital had been divided and credited separately, while the remaining movable and immovable properties were kept joint only because immediate division was inconvenient. The income and losses from those properties were to be shared equally, and separate accounts were maintained. On these facts, the agreement evidenced a disruption of the joint family status from the date of the agreement. The remaining properties were not held as joint family properties in the continuing sense, but as properties of persons holding as tenants-in-common. In such a situation, the deceased's share could not be treated as part of a subsisting joint family for aggregation.

Conclusion: The aggregation of the deceased's share under Section 34(1)(c) of the Estate Duty Act was not justified, and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded because the family had ceased to remain joint in the relevant sense after the partition agreement, and the deceased's share in the remaining properties was not liable to be added for aggregation.

Ratio Decidendi: Where a partition agreement effects severance in status and the parties thereafter hold the remaining properties as tenants-in-common, the deceased's share is not aggregable as joint family property for estate duty purposes.

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