1. This appeal relates to the estate of late Bhanwarlal who died on 20-12-1979.
2. The first point in dispute relates to the valuation of jewellery.
The accountable person claimed that the valuation should be based on the rates given by the Jewellers Association, whereas the authorities below have taken the rate as on 31-12-1979 as the basis. After hearing the revenue, we sec no reason why the rate as on date of death as certified by Jewellers Association should be ignored. We, therefore, direct that the jewellery should be valued accordingly.
3. The second point in dispute relates to the aggregation of lineal descendants' share in the HUF property. The contention of the accountable person that no such aggregation can be made has to be rejected in view of several decisions of the High Courts holding against the accountable person.
4. The next contention is that there is no mechanism for ascertaining the share of the lineal descendants and, therefore, Section 34(1)(c) of the Estate Duty Act, 1953 ('the Act') could not be applied. Here again, the very mechanism prescribed in Section 39 of the Act provides the means of ascertaining the share of lineal descendants. Hence, it cannot be said that there is no mechanism for ascertaining the share of the lineal descendants The next argument was that there was no charge on the share of the lineal descendants. But, this is obviously incorrect because of the very terms of Section 34(1)(c) read with Section 5 of the Act which imposes a charge on the principal value which necessarily includes the share of lineal descendants which is to be aggregated in the principal value.
5. The last contention was that while aggregating the share of the lineal descendants, the share falling to the wives of the sons should be excluded. It is pointed out that the deceased had three sons who are married and if a complete partition is made, the shares allocable to the wives of the sons should be excluded since they are not lineal descendants. On the other hand, the revenue relied upon the decision in CED v. Prakashchand  147 ITR 1 (MP) where it was held that in the notional partition, under Section 39, only the widows of the sons could be entitled to a share and not the wives of the sons. The Madhya Pradesh High Court has disagreed with the view taken by the Calcutta High Court in Satyanarayan Saraf v. ACED  111 ITR 432 that the notional partition contemplates a partition between the sons of the sons also. But, this conflict can be easily resolved if we refer to the two decisions of the Supreme Court. In the case of Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum  129 ITR 440, the Supreme Court held that under Explanation 1 to Section 6 of the Hindu Succession Act, 1956, what is required to be assumed is that a partition had, in fact, taken place and that fact must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. They further observed that to make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. In the other case of Kalloomal Tapeswari Prasad (HUF) v. CIT  133 ITR 690, the Supreme Court has explained that in a joint family consisting of father, sons and grandsons, there is a total partition only when each of them takes a share and there will be only a partial partition if there is a division only between the father and sons not taking into account the grandsons. It must be remembered that the wording of Section 39 of the 1953 Act referring to 'a partition immediately before his death' closely follows the wording in Explanation 1 to Section 6 of the Hindu Succession Act which is 'if a partition of the property has taken place immediately before his death'. In our opinion, therefore, the partition referred to in both these enactments must, as observed by the Supreme Court, be a total partition. In such a total partition, the shares of the wives of the sons must also be provided for. The revenue objected to it on the ground that the family having migrated to the south, the ladies may not have a share because of the Southern school of Hindu law. But, the presumption is that they carry the personal law with them and in the absence of any evidence to rebut that presumption, we must take it that the family of the deceased is governed by Northern school of Hindu law and the ladies are entitled to a share on partition. Those ladies not being the lineal descendants of the deceased, their shares cannot be aggregated under Section 34(1)(c). We, therefore, direct the Assistant Controller to recompute the principal value after ascertaining afresh the correct shares of the lineal descendants and aggregating it.
6. The last ground relates to the imposition of interest Under Rule 42 of the Estate Duty Rules, 1953. We find that the Assistant Controller has not made a speaking order in this regard. We, therefore, deem it fit to direct him to reconsider the matter while recomputing the principal value of the estate.