Blending of self-acquired property into Hindu family stock is not a transfer and does not trigger estate duty inclusion.

A coparcener's unilateral act of throwing self-acquired property into the common stock of a Hindu undivided family was treated as blending, not as a transfer or disposition in the statutory sense. On the facts, the properties had been treated as joint family assets long before the critical estate duty period, so they were not includible as property passing or deemed to pass on death. The analysis further held that such blending does not amount to creation of a new right or extinguishment of a right attracting sections 9 or 27(1) or the Explanations to section 2(15) of the Estate Duty Act, 1953.

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Issues: (i) Whether the deceased had, long prior to death, thrown his self-acquired properties into the common stock of the Hindu undivided family so that the properties were not liable to be included in the estate as passing or deemed to pass on death; (ii) whether a unilateral declaration throwing self-acquired property into the common stock amounts to a disposition, creation of other right, or extinguishment of right so as to attract sections 9, 27(1) and the Explanations to section 2(15) of the Estate Duty Act, 1953.

Issue (i): Whether the deceased had, long prior to death, thrown his self-acquired properties into the common stock of the Hindu undivided family so that the properties were not liable to be included in the estate as passing or deemed to pass on death

Analysis: The assessment history showed that the properties were treated as belonging to a Hindu undivided family from an early period, and the declaration published shortly before death was read as reaffirming an earlier state of affairs rather than creating a fresh change. Since no formalities are required for impressing self-acquired property with the character of joint family property, the surrounding circumstances and the long course of treatment of the assets supported the conclusion that the blending had occurred well before the two-year period relevant for estate duty.

Conclusion: The properties were held as joint family properties long prior to the critical period and were not liable to be included in the estate on that basis.

Issue (ii): Whether a unilateral declaration throwing self-acquired property into the common stock amounts to a disposition, creation of other right, or extinguishment of right so as to attract sections 9, 27(1) and the Explanations to section 2(15) of the Estate Duty Act, 1953

Analysis: The doctrine of blending or throwing into the common stock operates by unilateral volition of a coparcener and does not involve a bilateral or multilateral transfer. On that principle, such an act is not a disposition within section 27(1), does not amount to creation of a right enforceable against the deceased within Explanation 1 to section 2(15), and does not constitute extinguishment of a right at the expense of the deceased within Explanation 2. The property, once blended, becomes joint family property and the interest of the coparcener is not extinguished in the statutory sense.

Conclusion: The unilateral blending of self-acquired property did not attract sections 9 or 27(1) or the Explanations to section 2(15) of the Estate Duty Act, 1953.

Final Conclusion: The reference was answered in favour of the accountable person, and the estate duty assessment could not include the property in entirety as property passing or deemed to pass on the deceased's death.

Ratio Decidendi: A coparcener's unilateral act of throwing self-acquired property into the common stock of a Hindu undivided family is not a disposition or transfer in the statutory sense and, once blending is established, the property assumes joint family character without attracting estate duty as passing or deemed to pass on death.

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