Statutory deeming fiction can bring coparcenary relinquishment within estate duty when the deceased's right is extinguished.

For estate duty purposes, a coparcener's relinquishment of share in joint family property, or its treatment as a partition, can fall within the statutory deeming fiction under Section 9 read with Explanation 2 to Section 2(15) of the Estate Duty Act, 1953, because extinguishment of the deceased's right and corresponding benefit to another is treated as a disposition. The value passing on death was therefore includible, subject to the statutory deduction under the proviso to Section 27. The argument that Section 9 was inapplicable because the disposition occurred within two years of death was rejected, since that timing did not take the transaction outside the charge when the other conditions were satisfied.

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Issues: (i) Whether the relinquishment of a coparcener's share in joint family property, or its treatment as a partition, attracted estate duty as a deemed disposition under Section 9 read with Explanation 2 to Section 2(15) of the Estate Duty Act, 1953; (ii) Whether Section 9 was inapplicable because the disposition had taken place within two years of the deceased's death.

Issue (i): Whether the relinquishment of a coparcener's share in joint family property, or its treatment as a partition, attracted estate duty as a deemed disposition under Section 9 read with Explanation 2 to Section 2(15) of the Estate Duty Act, 1953.

Analysis: The relinquishment or partition did not require the Court to treat the transaction as a transfer in the ordinary sense. Explanation 2 to Section 2(15) creates a statutory deeming fiction where a right of the deceased is extinguished and a corresponding benefit accrues to another. Section 9 cannot be read in isolation, and the statutory scheme shows that such a disposition is within its scope. The value passing on death was therefore includible, subject to the statutory deduction reflected by the proviso to Section 27.

Conclusion: The issue was answered in favour of the Revenue and against the accountable person.

Issue (ii): Whether Section 9 was inapplicable because the disposition had taken place within two years of the deceased's death.

Analysis: The two-year condition operates as a deeming basis for chargeability where a gift is made not bona fide two years or more before death. A disposition made within two years of death is not excluded on that ground; on the contrary, it falls within the charge contemplated by the section if the other conditions are satisfied.

Conclusion: The contention was rejected and the issue was answered against the accountable person.

Final Conclusion: The reference was decided in favour of the Revenue, and the value of the deceased's share was correctly brought to estate duty under the statutory deeming provisions.

Ratio Decidendi: For estate duty purposes, a statutory deeming provision can treat the extinguishment of a deceased's right and the corresponding accrual of benefit to another as a disposition in the nature of a transfer, and Section 9 applies to such transactions when the statutory conditions are met.

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