1. By this reference under Section 64(1) of the E.D. Act, 1953 (hereinafter referred to as 'the Act'), the Appellate Tribunal, Indore Bench, has referred the following questions of law to this court for its opinion :
'(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the deceased continued to remain a co-owner in all the properties including the properties given away to the four sons and the agricultural land retained by him and instead of holding as joint tenants, they held all the properties as tenants in common
(2) Whether the Appellate Tribunal was justified in law in holding that in order to ascertain the shares of the lineal descendants of the deceased, a notional partition of the smaller HUF is also to be considered and the shares given to the sons, wife/wives should be excluded while determining the shares of the lineal descendants for the purposes of Section 34(1)(c) of the Estate Duty Act, 1953?'
2. The facts giving rise to this reference briefly are as follows : While computing the amount of estate duty payable by the accountable person in respect of the estate of the deceased, Shri Raichand Chopra, the Asst. Controller, rejected the claim of the accountable person that immovable properties owned by the HUF were partitioned amongst the members of the HUF. The Asst. Controller held that the properties comprised in the partition deed continued to belong to the HUF of the deceased, his wife and five sons. On appeal, the Appellate Controller upheld the finding of the Asst. Controller. On further appeal before the Tribunal, the Tribunal held on the basis of the material on record that there was a severance of the status and that the deceased continued to remain co-owner of all the property including the property given away to his four sons. The Tribunal further held, following the decision in Satyanarayan Saraf v. Asst. Controller : 111ITR432(Cal) , that for rate purposes, a notional partition of the smaller HUF was also contemplated whereby the wives of the sons of the deceased would also be entitled to share equally with the sons of the deceased. Aggrieved by the order passed by the Tribunal, the Department sought a reference and it is at the instance of the Department that the aforesaid questions of law have been referred to this court for its opinion.
3. So far as question No. 1 is concerned, the finding of the Tribunal that there was a partition in the HUF of the deceased is a finding of fact. Thequestion as to whether there was any legal evidence before the Tribunal for arriving at the aforesaid finding has not been referred to us. In view of the finding of the Tribunal that there was a partition, the Tribunal must be held to be justified in holding that the deceased continued to remain a co-owner of the property in question.
4. As regards question No. 2, learned counsel for the Department conceded that the matter was concluded by our decision in M.C.C. No 148 of 1981 (CED v. Prakashchand : 147ITR1(MP) ), wherein, differing from the view taken in Satyanarayan Saraf v. Asst. Controller : 111ITR432(Cal) , we have held that notional partition contemplated by Section 39 of the Act is between the deceased and other members of the HUF who are entitled to a share iu the joint family property, if a partition were to take place in the lifetime of the deceased and that the wives of the sons of the deceased cannot be brought into the picture at that stage.
5. For all these reasons, our answer to question No. 1 referred to us is in the affirmative and against the Department. As regards question No. 2, our answer to that question is in the negative and in favour of the Department.
6. As none appeared on behalf of the accountable person, parties shall bear their own costs of this reference.