S. Obul Reddy, C.J.
1. The question that arises in this reference is whether the assessee is entitled to invoke in his favour Section 54 of the I.T. Act, 1961.
2. The facts giving rise to this reference are these: The assessee was one of the four brothers. They constituted a joint Hindu family. The four brothers partitioned the properties by executing a registered deed of partition on May 19, 1951. Again, on August 27, 1957, there was another deed of partition whereby certain allocations made under the earlier deed were altered and fresh allocations made. Under this deed, a house at Madanapalle, which was in the occupation of their mother, was allowed to be kept joint between the four brothers. On August 25, 1966, the brothers entered into another agreement under which the other three brothers agreed to give properties worth one lakh of rupees to the assessee, their elder brother, towards 'Jeshta bhagam' in addition to his 1/4th share in consideration of his having improved and developed the family properties. This consideration was made up of the value of the shares of the three brothers in the Madanapalle house, each share being valued at Rs. 30,000. The three brothers, by separate documents styled as release deeds, relinquished their rights, title and interest in that undivided house at Madanapalle. The share of the three brothers was fixed at Rs. 30,000 each. The consideration was not obtained in cash ; but by virtue of the relinquishment deeds executed by the three brothers, the assessee became the absolute owner of that property. The assessee *earlie^ sold a house belonging to him in Bangalore for Rs. 1,50,000. He claimed exemption in respect of the Madanapalle house on the ground that, under the relinquishment deeds executed by his three brothers, each had a share the value of which was fixed at Rs. 30,000, and that he should be deemed to have obtained transfer of their right, title or interest in that property. The ITO did not grant exemption on the ground that the relinquishment deeds executed by the three brothers cannot be deemed to be deeds of transfer. But the AAC, on appeal, was of the opinion that, though the documents executed by the three brothers were styled as deeds of release, they, in fact, operate as deeds of conveyance and, therefore, the assessee is entitled to relief under Section 54 of the Act. This finding ofthe AAC has been affirmed by the Tribunal and hence the following question has been referred to this court:
'Whether, on the facts and in the circumstances of the case, the asses-see is entitled to deduction of the value of the property released in his favour by the three brothers, from the capital gain in terms of Section 54 of the Act ?'
3. Mr. Rama Rao, the learned counsel appearing for the revenue, invited our attention to a decision of the Madras High Court in Radhakristnayya v. Sarasamma, : AIR1951Mad213 , to contend that properties, which devolved upon the divided members of a coparcenary upon partition, would not come within the meaning of 'transfer'. Subba Rao J., speaking for the Bench, said :
'Partition is really a process in and by which an enjoyment is transformed into an enjoyment in severalty. Each one of the sharers had an antecedent title and, therefore, no conveyance is involved in the process as a confirment of a new title is not necessary. A partition, therefore, is not a transfer within the meaning of Section 53A, T.P. Act.'
4. This view was endorsed by the Supreme Court in Kuppuswami Chettiar v. Arumugam Chettiar, : 1SCR275 .
5. We are not here concerned with a partition and consequent enjoyment of the properties by the sharers in severalty. The partition among the four brothers was effected as early as in May, 1951. Only one item of property was kept undivided. After partition, this property was held by the four brothers as tenants-in-common. The three other brothers of the assessee agreed, under an agreement executed by them in favour of their elder brother, to give Rs. 30,000 each to their elder brother towards jeshta bhagam for having improved and developed the joint family properties. It is in lieu of payment of Rs. 30,000 by each of them to their elder brother under the agreement entered into between them that they parted with their 3/4ths rights in the Madanapalle house. The relinquishment deed, therefore, cannot be equated to a deed of partition. Each of the brothers after partition was entitled to 1/4th share in the Madanapalle house. It is in respect of that 1/4th share or interest, which was valued at Rs. 30,000, that the release deeds were executed by the three brothers in fayour of their elder brother, the assessee. In Kuppuswami Chettiar v. Arumugam Chettiar, : 1SCR275 , the Supreme Court held :
'Now, it cannot be disputed that a release can be usefully employed as a form of conveyance by a person having some right or interest to another having a limited estate, e.g., by a remainderman to a tenant for life, and the release then operates as an enlargement of the limited estate. But in this case we are not concerned with a release in favour of the holderof a limited estate. Here, the deed was in favour of a person having no interest in the property and it could not take effect as an enlargement of an existing estate. It was intended to be and was a transfer of ownership. A deed called a deed of release can, by using words of sufficient amplitude, transfer title to one having no title before the transfer.'
6. Admittedly, the assessee had no title in respect of 3/4ths share of the house at Madanapalle. His right was only limited to 1/4th share in that property. The three brothers had agreed to transfer each one's interest in that property, which was valued at Rs. 30,000 to be relinquished in favour of their elder brother, the assessee. We are, therefore, of the opinion that the release deeds in this case, as rightly found by the Tribunal, transfer the title or interest of the three divided brothers to the other divided brother, the assessee, who had no title in respect of the 3/4ths of the property.
7. In the result, the reference is answered in the affirmative and against the revenue with costs. Advocate's fee Rs. 250.