R.K.GULATI, J. - (1.) AT the instance of the Commissioner of Income -tax, Meerut, under Sub -section (1) of Section 64 of the Estate Duty Act, 1953, the Income -tax Appellate Tribunal, B -Bench, Delhi, has referred the following question of law for the opinion of this court: 'Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that there has been a severance of status of the ancestral Hindu undivided family property as on March 14, 1973, and in view of that the share of the deceased that passed on his death on March 23, 1973, works out to one -third of the properties ?'
(2.) THE brief facts are that one Sri Niranjan Prakash Gupta died on March 23, 1973, leaving certain assets, both movable and immovable, in his individual as well as Hindu undivided family capacity. In the return filed by Rakesh Kumar Gupta, the accountable person and the son of the deceased, the principal value of the, assets disclosed included the value of one -third share in agricultural land measuring 9.2 acres situated near the municipal terminal, Meerut. In order to justify the claim that the deceased had only one -third share in the agricultural holding aforesaid, in the assessment proceedings, it was claimed that the said agricultural land was ancestral property which had devolved on the deceased from his father, Ram Swarup, who had died before the U. P. Zamindari Abolition and Land Reforms Act, 1950, came into being. In support of this claim, copies of khatauni for 1305 and 1352 Fasli were filed. Further, the land being ancestral and Rakesh Kumar Gupta (accountable person) being the son of the deceased, having been born on June 12, 1950, i.e., before the Zamindari Abolition and Land Reforms Act, the deceased's share in the said agricultural holding was 50% at the time the Zamindari Abolition and Land Reforms Act was enforced. There is no indication about the nature of the holding before the enforcement of the said Act. It was also claimed that, as per the family settlement for the agricultural holding in question, vide application dated March 14, 1973, the correct share of the deceased was one -third only which passed on his death and one -third belonged to the accountable person while the other one -third belonged to the widow of the deceased. In terms of familysettlement, it was claimed, a decree was passed by a competent court, though after the death of the deceased, with necessary modification, allocating the share of the deceased also in equal shares between the accountable person and the widow of the deceased. In other words, under the settlement decree, the son and the wife of the deceased both got 50% share each in the agricultural holding aforesaid.
(3.) THE Assistant Controller of Estate duty rejected the case set up by the accountable person and he added 50% of the value of the agricultural holdings in the estate duty assessment of the deceased. He took the view that, according to Section 37 of the Zamindari Abolition and Land Reforms Act, the agricultural land in the case of the joint Hindu family devolved upon the male lineal descendants in the family, and the lady or wife of a living husband has no share in such agricultural holdings as women have been excluded from such rights under Section 18(3) of the Zamindari Abolition and Land Reforms Act. He held that Section 37 speaks of intermediary and 'intermediary' in Section 3(12) has been defined to mean the proprietor, under -proprietor, sub -proprietor, thekedar, holder of such estate or part thereof. In the above circumstances, the Assistant Controller held that the land being ancestral, the deceased had 50% share in such agricultural holdings while the other 50% share in such agricultural holdings belonged to his son as male lineal descendant having been born before the Zamindari Abolition and Land Reforms Act came into being. Alternatively, he held that the transfer, if any, or settlement which was made by filing the application on March 14, 1973, being within two years of the death of the deceased, the same was liable to be treated as deemed gifts under Section 9 of the Estate Duty Act Accordingly, on the alternative finding also, he held that 50% of the value of the agricultural land was liable to be assessed as property passing on the death of the deceased.;