TMI Blog1968 (12) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... this reference are as follows: One Smt. Kancharla Kotamma died on 9th April, 1958. She was the widow of one Kancharla Venkataramayya, who died in April, 1940, leaving his widow, the aforesaid Kotamma, and two sons. They constituted a Hindu joint family. Before partition could be effected, the elder son, Sri Chandrasekhara Rao, died in the year 1941, leaving behind six minor sons and his widow. Subsequently, a partition was effected between the members of the family by a registered partition deed dated 16th June, 1943. Under one of the clauses of the partition deed, a life estate in respect of Ac. 25.00 of agricultural lands was created in favour of the widow, Smt. Kancharla Kotamma, with a vested remainder in favour of the other son, Kes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rasekhara Rao, who had no vested interest at the time the partition was effected. On further appeal to the Income-tax Appellate Tribunal, it was held that the life interest created in favour of the widow was in substitution of the rights which she had otherwise in the estate of her deceased husband under sub-section (2) of section 3 of the Hindu Women's Rights to Property Act of 1937 and that on relinquishment by her of the said rights she got the right to enjoy the properties described in the C schedule of the partition deed dated 16th June, 1943, for her lifetime, that the disponers got a valuable right in respect of the share which otherwise would have fallen to the widow on the death of Venkataramayya and that it was therefore a benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty." The said section provides for exemption from the estate duty if, by the disposition of the property, an interest is conferred on any person other than the disponer for the life of such person or determinable on his death and that the property must revert to this disponer in his lifetime and the person taking the life estate or determinable interest must not at any time prior to the disposition have been competent to dispose of the said property. There is no controversy before us that by reason of the clause contained in the partition deed a life estate is created in respect of 25 acres of agricultural land which is the subject-matter of the reference. The contention of the learned counsel for the revenue is that the life estate i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned with the provisions of the said Act inasmuch as the rights of the deceased, Kotamma, have to be decided with reference to the Central Act, 1937, which was in force at the time of the death of her husband. Admittedly, Kotamma had a right to exclusive possession of one portion in the non-agricultural properties and a right to be maintained out of the agricultural properties belonging to the joint family. Similarly, the widow of Chandrasekhara Rao, one of the sons who died in the year 1941, had similar rights in the joint family properties. On 16th June, 1943, when the partition was effected, it is only the Central Act that was in force and in effecting the partition what happened was that the widow, Kotamma, relinquished her rights in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falls within the meaning of the expression "disposition". Admittedly, the widow had no rights to the possession of the agricultural lands. For the first time under the said document, a life estate was created in her favour in respect of the 25 acres of agricultural land. This would certainly amount to conferment of a life estate under the partition. Therefore, we are of the opinion that the conferment of the life interest is a disposition falling within section 24 of the Act. The next submission of the learned counsel for the revenue is that the reverter of the property is not to the disponers only, but to the disponers and a third party, namely, the widow of Chandrasekhara Rao, and that the exemption under section 24 of the Act cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any merit as it is obvious that the widow, Kotamma, had no interest in the 25 acres of agricultural land at any time prior to the partition deed. She had only a right to be maintained out of the income from the agricultural properties and she had no right to be in possession of the corpus itself. The proviso is, therefore, clearly inapplicable to the facts of the case. Sri Ananta Babu sought to rely upon a decision in Inland Revenue v. Lyel. But this case is decided on the language of section 15 of the U.K. Finance Act, 1896. Though section 24 is based upon the provisions of section 15 of the U.K. Finance Act, the scope of section 24 in the Indian Act is more liberal than the corresponding section under the English Act. Secondly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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