Endowment by conduct and surrounding circumstances can outweigh absence of a formal deed in determining property ownership for estate duty.

Long-standing treatment and user of property as endowed property can support a legal inference of dedication even without a formal deed, because no writing is necessary to create an endowment. On the facts, the surrounding circumstances-account treatment, dealings with tenants and leases in the trust's name, and later registration in the temple manager's and trust's name-supported endowment status, while the revenue's reliance on omission from an earlier deed and prior revenue entries did not establish private ownership. The reference was treated as raising a mixed question of law and fact and was held competent. The inclusion of the deceased's one-fifth share value in the estate was therefore not justified, and the estate duty assessment failed to that extent.

---

---

Issues: (i) Whether the reference raised a question of law and was competent; (ii) Whether the inclusion of Rs. 54,720 representing the deceased's one-fifth share in the Hardwar and Jhunjhnu properties in the principal value of the estate was justified in law.

Issue (i): Whether the reference raised a question of law and was competent

Analysis: The question whether the properties in dispute were endowed property or belonged to the Hindu undivided family turned on the legal effect of facts found by the revenue authorities. That involved application of legal principles to established facts and therefore presented a mixed question of law and fact.

Conclusion: The preliminary objection was overruled and the reference was held to be competent.

Issue (ii): Whether the inclusion of Rs. 54,720 representing the deceased's one-fifth share in the Hardwar and Jhunjhnu properties in the principal value of the estate was justified in law

Analysis: The absence of a formal deed of dedication did not conclude the matter because no writing is necessary to create an endowment. The surrounding circumstances, including treatment of the income and expenditure in the trust accounts, dealings with tenants and leases in the name of the trust, and later registration in the name of the temple manager and the trust, supported the conclusion that the property was endowed property. The circumstances relied upon by the revenue, such as omission from the 1919 deed and earlier revenue records in the name of the dharam karta, were not inconsistent with the assessee's case and did not establish private ownership.

Conclusion: The finding that the property belonged to the Hindu undivided family was unsupported by the evidence, and the inclusion of Rs. 54,720 in the principal value of the estate was not justified in law.

Final Conclusion: The reference was answered against the revenue, the disputed property was treated as endowed property, and the estate duty assessment was set aside to that extent in favour of the assessee.

Ratio Decidendi: Where established facts show long-standing treatment and user of property as endowed property, the absence of a formal deed is not decisive, and the legal inference as to ownership must be drawn from the totality of circumstances.

---