TMI Blog1979 (10) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... of the joint Hindu family which owned a number of properties including Neel Bagh Palace at the time of his death. In the present reference we are concerned with the inclusion of 1/3 share of the son in the joint family property under s. 34(1)(c) of the E.D. Act, the claim for deduction of estate duty from the principal value of the estate of the deceased, and the valuation of the Neel Bagh Palace. The Assistant Controller included the value of one-third share of the adopted son in the principal value of the estate for rate purposes. He also negatived the claim of the accountable person regarding deduction of estate duty as, in his view, the estate duty was neither a debt nor an encumbrance, which was liable to be deducted under s. 44 while calculating the principal value. As regards the valuation of the Neel Bagh Palace he accepted the valuation given by the executive engineer, valuation cell, I.T. Dept., Lucknow, in preference to the valuation given by the accountable person, which was based on the report of an approved valuer, Sri T. N. Gupta. The appeal filed by the accountable person failed and thereupon the matter was taken up before the Tribunal. The Tribunal held against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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, ill particular, a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law." As has been seen the Maharaja had a lineal descendant, i.e., adopted son, and s. 34(1)(c) apparently permitted an aggregation of the value of the interest of the lineal descendant in the principal value of the estate of the deceased. Counsel for the assessee, however, urged that with the passing of the Hindu Succession Act, 1956, being Act No. 30 of 1956, a coparcener is deemed to be separate from the other coparceners, and as such there was no coparcenary in existence at the time of the Maharaja's death. It was also urged that the entire conception of coparcener and coparcenary property stands abrogated in view of ss. 6 and 30 of the Hindu Succession Act, 1956, and, as such, s. 34(1)(c) has become redundant, and could not be applied. For reasons to be set out hereinafter we are unable to accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation.-The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarwad, tavazhi, illom, kutumba or kavaru in the property of the tarwad, tavazhi, illom, kutumba or kavaru shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this sub-section." Counsel for the assessee urged that the proviso to s. 6 effects a disruption in the coparcenary family in case a person has a female or male relative, specified in cl. (1) of the Schedule to the Act. It was stressed that once a partition in the family has taken place on account of the fiction created by the proviso to s. 6, the Maharaja must be deemed to have been separated from his adopted son before his death, and as such the value of the estate of the son could not be aggregated with that of the deceased Maharaja. There is an inherent fallacy in this argument. In the first place, the proviso creates a fiction only for purposes of s. 6. Now, s. 6 sets out the mode of devolution of interest in coparcenary property. Thus, the fiction created by the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of that property had taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place, must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, one of them being that a coparcener cannot dispose of his undivided interest in the coparcenary property by gift nor can he alienate his interest even for value except in Bombay, Madras and Madhya Pradesh. Similarly, a coparcener cannot bequeath his coparcenary property by will. So far as s. 30 is concerned all that it does is to lift the bar on testamentary disposition of undivided interest of a coparcener in his coparcenary property. The other rights which a coparcener has are left untouched. Thus, as s. 30 does not impinge upon the other rights which a coparcener has under the Hindu law, nor does it expressly or by implication affect the existence of coparcenary, the abrogation of the restriction of testamentary disposition does not destroy the existence of a coparcener or coparcenary property. This being so, the interest of the son of the deceased, Maharaja, was rightly aggregated in the principal value of the estate of the deceased. So far as the second question is concerned the field is completely covered by the decisions in In re Mrs. Constance Lubeck [1970] 78 ITR 199 (Mad), Smt. V. Pramila v. CED [1975] 99 ITR 221 (Kar), CED v. Estate of Late Omprakash Bajaj [1977] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able rent fixed under the Act or that declared by the District Magistrate under s. 3A by the civil court, but in the case of an agreed rent the court can vary it only in case the contract was unfair. Thus, contrary to the Rent Control Act as prevailing in the State of West Bengal, under the U.P. Rent Control Act, 1947, no restriction has been put on the landlord to fix a rent higher than the annual reasonable rent in case the tenant agrees. No penal consequence ensues in case the agreed rent is higher than the annual reasonable rent, and once rent has been agreed between the landlord and the tenant, it cannot be varied unless the transaction is unfair. The provisions of the U.P. Rent Control Act being dissimilar to the provisions of the Rent Control Act of West Bengal, the principle laid down by the Supreme Court in Padma Debi's case, AIR 1962 SC 151, cannot be made applicable for purposes of valuing the Neel Bagh Palace. We, accordingly, answer the first two questions in the affirmative, and the third question by saying that the Tribunal is correct in holding that the self-occupied properties constructed prior to 1st January, 1951, were governed by the U.P. (Temporary) Control ..... X X X X Extracts X X X X X X X X Extracts X X X X
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