Law:

Section:

JUDGMENT Bhagwati, CJ.-This reference raises a question of some importance depending for its determination on the inter-action of the provisions of Hindu law and the Estate Duty Act, 1953. Prior to 3rd January, 1950, one Trikamlal Vadilal (hereinafter referred to as the deceased), his son, Kantilal, and his two grandsons by a pre-deceased son, namely, Lalbhai and Parshottam, constituted a Hindu undivided family. There was a partition between the deceased and Kantilal, on the one hand, and Lalbhai and Parshottam, on the other, by a deed of partition dated 3rd January, 1950, and as a result of the partition, certain movable and immovable properties including a share in two partnership firms, namely, Messrs. Manilal Premchand and Messrs. Chimanlal Premchand, came to the share of the deceased and Kantilal. These movable and immovable properties continued to be held by the deceased and Kantilal as members of a joint and undivided Hindu family until 16th November, 1953, when an instrument styled "release deed" was executed by and between the deceased and Kantilal. Considerable controversy between the parties turns on the interpretation of this instrument and it will therefore be necessary for us to refer to its terms in some detail and we shall do so when we deal with the arguments advanced on behalf of the parties. Suffice it to state for the present that, under this instrument, a sum of rupees one lakh out of the joint family properties was taken by the deceased in lieu of his share in the joint family properties and he relinquished his interest in the remaining properties of the joint family which were declared to belong to Kantilal as his sole and absolute properties and Kantilal also, in his turn, relinquished his interest in the amount of rupees one lakh given to the deceased and declared that the deceased was the sole and absolute owner of the said amount, Within two years from the date of this instrument, on 3rd June, 1955, the deceased died and on his death, the question arose as to what was the estate duty chargeable on his estate. Kantilal, who is the accountable person before us, filed a return showing the status of the deceased as individual and the…

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