TaxTMI 
TaxTMI 
1979 (9) TMI 33
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....ond class Sardar holding a watan estate in the district of Khandesh under a sanad under the Gorden Settlement granted by the then Government on May 12, 1899. Gangadharrao died on March 7, 1926, leaving surviving him his widow, Anandibai, but without leaving any male heir, lineal, collateral or adopted. After the death of Gangadharrao, Anandibai requested the revenue authorities concerned to enter her name to the cash allowance and the watan inam lands in place of her deceased husband. This request was negatived by the revenue authorities. Anandibai then made a petition to the Government on September 17, 1926, seeking permission to adopt a son from outside the watan family. This permission was granted by the Government by its resolution No. 8345/24 dated April 13, 1927, which permitted Anandibai to adopt a boy from outside the watan family. On April 18, 1931, an ante-adoption agreement was entered into between Anandibai and one S. V. Dasture, the natural father of the boy proposed to be adopted, the said agreement having been entered into by the natural father on behalf of the said boy. We shall discuss this agreement in some detail a little later. It is sufficient to note at this s....
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.... before us, it is desirable to take note of the relevant provisions of ss. 7 and 24 of the said Act. Sub-s (1) of s. 7 of the said Act runs thus: " 7. (1) Subject to the provisions of this section, property in which the deceased, or any other person had an interest ceasing on the death of the deceased, shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cesser of such interest, including, in particular, a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law." The other provisions of s. 7 are not material for the purposes of this case. Sub-s. (1) of s. 24 of the said Act runs thus : " 24. (1) Where by a disposition of any property an interest is conferred on any person, other than the disponer, for the life of such person or determinable on his death, the remainder being conferred upon the disponer absolutely, and such person enters into possession of the interest, and thenceforward retains possession of it, then, on the death of such person, the property shall not be deemed to pass by reason only of its reverter to the disponer in his lifetim....
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....t it, then the general privilege of adopting at any time, any person (without restriction as to family) who can be legally adopted, will be granted by the Goverment to the watan, on the payment from that time forward in perpetuity of an annual nuzzerana of one anna in each rupee of the above total emoluments of the watan." On a plain reading of these conditions, particularly the first condition, it is clear that the duration of the grant was only so long as there was any male heir to the watan, whether lineal, collateral or adopted, within the limits of the family of the watandar in existence. The second and third conditions relate to the question of adoption. These provisions show that on the death of Gangadharrao the watan was liable to lapse and it was only by reason of the adoption made by Anandibai that the watan continued. As we have already pointed out, Anandibai adopted Ramchandrarao after obtaining permission from the Government. The said permission was given by the Government resolution on April 13,1927, on payment of the annual nuzzerana of one anna in the rupee. Coming now to the agreement of April 18, 1931, entered into by Anandibai with the natural father of Ram....
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....be said that by the said agreement there was any disposition of the said watan lands in favour of Anandibai. In this regard, we must point out, and it is conceded by the department, that Anandibai did have a life interest in the said watan lands. In fact, if there was no such interest, there could be no question of the value of the said lands being included in her estate. It is clear that, in view of the aforesaid sanad, on the death of her husband, who was the watandar, the watan was liable to lapse and Anandibai could not be said to have any interest in the said watan lands. It was only by reason of the adoption of Ramchandrarao that the watan could be continued. In this situation, we have to consider as to how Anandibai got the life interest in the said lands if not under this agreement, or under the agreement dated December 22, 1934. It appears to us that on a plain reading of cl. (6) of the said agreement of April 18, 1931, it was under the said clause that the right was given to Anandibai to possess and enjoy the said watan lands during her lifetime. It must be appreciated that in view of the aforesaid decision of the Privy Council the said provision in the agreement dated Ap....
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....tion, Mr. Kotwal relied on the aforesaid decision of the Supreme Court in CED v. Kancharla Kesava Rao [1973] 89 ITR 261. In that case, in a partition effected between the members of a HUF, the deceased, a widow who had a right to her husband's share in the non-agricultural properties as well as a right to be maintained from the family income, gave up both the rights and, in lieu thereof, the other members of the family allotted to her 25 acres of wet land, which she was to enjoy during her lifetime. The question was whether the property allotted to her passed on her death under s. 7 of the said Act or whether the arrangement under the partition deed was a " disposition " within the meaning of s. 24 of that Act and there was merely a reverter to the disponer not attracting estate duty. It was held that under the partition deed there was merely an adjustment of rights of the various members of the family. The partition in the HUF did not amount to a " disposition " within the meaning of s. 24 and that section did not apply. We are afraid, the ratio of this decision has no application to the case before us. In that case, the widow in question gave up her rights to her husband's share ....