Ranganathan, J. - (1.) Both these matters raise the same question viz. whether the act of a member of a joint family by which he impresses his individual property with the character of joint family property or "throws" it into the hotchpotch of the joint family or "blends" it with the joint family property is a "disposition" within the meaning of the Estate Duty Act, 1953 (the Act, for short).
(2.) Civil Appeal No. 1204/79 is an appeal from an order of the High Court declining to call upon the Income-tax Appellate Tribunal to refer the above question for the decisions of the High Court in view of certain earlier decisions of the Court. The Madras High Court also declined to direct a reference on the above issue in T.C.P. No. 478 of 1977 and that is the subject-matter of SLP (C) No. 335 of 1979. In view of the pendency of Civil Appeal No. 1204/79, we grant special leave in SLP (C) No. 335/79 also.
(3.) Before discussing the correctness of the above conclusion, it may be convenient to set out the background of facts in Civil Appeal No. 1204/ 79. That appeal arises out of the estate duty assessment consequent on the death of one Natesan Chetty, who died on 1-3-72. He was the Karta of a Hindu Undivided Family (HUF) consisting of himself and his four sons. He was also the owner, in his individual capacity, of five house properties in Madras. On 18-6-1970 and 16-9-1970 he made declarations by which he impressed the above-mentioned properties with the character of joint family properties and declared that they would thereafter belong to HUF of which he was the karta. Subsequently, a partition was effected in the family in March, 1971 in which two of the abovementioned properties came to the share of the deceased. Sri Natesan Chetty had also borrowed a sum of Rs. 46,800/- from the HUF out of the rental income from the abovementioned properties for being invested in the business carried on by him. These borrowings were made between March 1970 and April 1971 and they were repaid in April 1971.;