Srinivasan, J.:— The assessment in the present case giving rise to the questions that stand referred to us is under the Wealth Tax Act. The assessee and a brother of his, Raghunath Rao, constituted a Hindu undivided family. Raghunath Rao died on 16th December 1956. The assessee became the sole surviving coparcener of the undivided family and in that capacity became entitled to all the properties of the family. Following upon the death of Raghunath Rao, the assessee made a return for purposes of estate duty and such duty was assessed at Rs. 62,196 by order of the Estate Duty Office dated 30th November 1957.

2. In support of the wealth tax assessment for the assessment year 1957-1958, the assessee made a return on 3rd, February 1958. In this return, he claimed his status to be that of a Hindu undivided family. He claimed also to be entitled to deduct the sum of Rs. 62,196 being the estate duty assessed on the death of Raghunath Rao. The Wealth Tax Officer found that the assessee the sole surviving coparcener of the joint Hindu family is an issueless widower and that there were no other persons entitled to any claims upon the estate. There were no widows or other female members of the family with rights to maintenance. He accordingly held the status of the assessee to be that of an individual. In so far as the claim to deduct the estate duty payable was concerned, the Wealth Tax Officer came to the conclusion that it became a liability only on the date of its determination, viz., 30th November 1957. As the wealth of the assessee had to be computed with reference to the valuation date, that is, the last day of the previous year, 30th March 1957, he decided that the liability to pay the estate duty would not be a proper deduction in respect of the valuation of the estate which has to be made as on the 31st March 1957.

3. Against this assessment, an appeal was taken to the Appellate Assistant Commissioner. The view of the Wealth Tax Officer that the assessee was liable to be assessed as an individual was upheld. The claim of the assessee made in the appeal that at least to the extent of Rs. 27,031 being the quantum of the estate duty which had been admitted us the assessee in his estate duty return, should be allowed, was also rejected. The further appeal to the Tribunal failed on the first of the above contentions. But the Tribunal was apparently inclined to accept the claim of the assessee that as on the valuation date, the assessee having accepted the liability of Rs. 27,031-37 as the amount payable as ana, for estate duty that amount was allowable as a deduction. On the application of the assessee Under Section 27(1) of the Wealth Tax Act, the following questions stand referred to us:—

“1. Whether the assessee is a Hindu undivided family for wealth tax assessment.

2. Whether Rs. 35,165 being the excess of the estate duty assessed over the duty payable on the return on the death of Raghunath Rao aforesaid is a liability deductible from the-net wealth for the assessment year 1957-1958.”

The principal, and, indeed, the sole argument of Mr. Ramaman, the learned counsel for the assessee, is that notwithstanding that the assessee is the sole surviving coparcener, the property continues to be joint family property, and if that is so, the assessment should be made in the status of an undivided Hindu family and not in the status of an Individual. The claim therefore is that the nature of the property determines the status of the person liable to be assessed. It is argued on this line of reasoning that though the assessee is the sole-surviving coparcener, the coparcener must be deemed to continue till such last coparcener dies and that therefore an individual can in certain circumstances assume the character of a Hindu undivided family. The short question is whether this interpretation of the legal position is correct.

4. Section 3 of the Wealth Tax Act contemplates three classes of assessable entities: (1) an individual; (2) a Hindu undivided family; and (3) a company. The rates of wealth tax specified in the schedule to the Act give in the case of a Hindu undivided family a larger slab of “nil” rate of to as compared with an individual. If, therefore, an assessee is assessed in the capacity of a Hindu undivided family, the first slab of the net wealth which is not taxable is a larger amount than if the liability is assessed as an individual. It is principally for the reason that a greater measure of relief is available to a Hindu undivided family that the assessee claims in the present case that he is entitled to be regarded a Hindu undivided family. Learned counsel for the assessee has referred to certain decisions which deal with the status of the sole surviving coparcener of a joint Hindu family and presses upon us the conclusion that since the property of the joint Hindu family is subject to certain incidents which-detract from the full and complete ownership of that property by the last surviving coparcener, the character of the property should in effect fasten upon the last surviving coparcener the character of a Hindu undivided family for the purpose of assessment.

5. In one of the early cases bearing upon the question Vedanthunni v. Commissioner of Income Tax (1933) 1 ITR-70 : (AIR 1933 Mad 733) the question arose whether the maintenance and arrears of maintenance received by the widow of a member of a Hindu undivided family were received by her as a member of an undivided family and were therefore exempt under Section 14(1) of the Indian Income-tax Act. This question was answered in favour of the assessee. In passing, the learned Judges observed that there could be a joint family even if the family is reduced to a single male member provided there are other members entitled to maintenance from the estate. They observed:

“But he (the Commissioner) contended that where the family has been reduced to a single male member, though there are a number of widows of deceased coparceners and other persons entitled to maintenance from him, there is no joint family. This is not the question referred to us by the Commissioner who assumes that there is an undivided Hindu family in the case. But even this contention I do not think if tenable. The passage already referred to from Mullah's Hindu law, relying on Surendra Nandan v. Sailajakant Das Mahapatra, ILR 18 Cal 385, and the Privy Council decision in Bachoo Hurkisondas v. Mankore Bai, ILR 31 Bom 373 (PC) shows that there can be a joint family with a single member provided there are other members entitled to maintenance from the estate.”

Having expressed themselves thus on that matter, the learned Judges specifically stated:—

“It is unnecessary for us to express any opinion in this case on (1) cases where there is a single male member and there are no widows of deceased coparceners entitled to maintenance……”

In the case before them the question of the assessability of the maintenance amount received by the widow arose obviously so long as the widow entitled to maintenance existed, the view taken was that there could be a joint family even when there was only a sole surviving coparcener. This case is distinguishable on the facts from the present case, for it is admitted that barring the single surviving coparcener, the assessee, there is no person, a widow or a female member entitled to any claim on the estate.

6. In Kalyanji Vitaldas v. Commr. of Income-tax Bengal, (1937) 5 ITR 90 : (AIR 1937 PC 36) the case arose in this manner. The father of a Hindu undivided family was a partner in a business. The father made gifts of capital to each of his sons who were subsequently taken into the partnership. It was not proved that the Individual partners had thrown their individual interests in the firm into the common stock at treated it as joint family property. The dispute was as to how the income of the sons was to be assessed for the purpose of super tax. Their Lordships observed:

“From these facts, it clearly appears that they are each member of a Hindu undivided family. Each has a son or sons from whom so far as the evidence goes he is not divided, but the Income from the firm is clearly the separate and self-acquired property of the partner, and as it has not been thrown into the common stock, it cannot be regarded as in come of the family. It is the income of an individual and assessable to super tax.”

Later they observed:

“……their Lordships, for the purposes of the present case, will assume that their interest was ancestral property, so that, if either had a son, the son would have taken an interest therein by birth. But no son having been born, no such interest has arisen to qualify or diminish the interest given by Moolji to Kanji and to Sewdas. Does then the existence of a wife, or of a wife and a daughter, make it income of a Hindu undivided family rather than income of the individual partner? Their Lordships think not. A man's wife and daughter are entitled to be maintained by him out of his separate property as well as out of property in which the has a coparcenery interest, but the mere existence of a wife or daughter does not make ancestral property joint. “Interest” is a word of wide and vague significance, and no doubt it might be used of a wife's or daughter's right to be maintained, which right accrues in the daughter's case on birth; but if the father's obligations are Increased, his ownership is not divested, divided or impaired by marriage or the birth of a daughter. This is equally true of ancestral property belonging to himself alone as of self-acquired property.” It is well established that a sole surviving coparcener can do what he likes with the coparcenery property. It is open to him to sell it or mortgage it or make a gift of it or dispose of it by will. He has absolute rights of disposal over such property. Nevertheless, his liability to maintain those entitled to be maintained is a personal liability which can sometimes be made a charge on the property. If a son is born into the family by birth or adoption, as the case may be, from that time onwards the property will become the joint property of the coparcener and the son. But it is undeniable that the son's interests will be subject to any prior alienation already effected by the sole surviving coparcener. These propositions are well accepted and do not require citation of authority.

7. The Judicial Committee had to consider the case of an impartible estate in Commr. of Income-tax Punjab v. Dewan Krishna Kishore (1941) 9 ITR 695. (AIR 1941 PC 120). The question arose in that case whether as regards house property the income of an impartible estate is chargeable in the hands of the assessee, who had succeeded by the rule of primogeniture, as that of a Hindu undivided family or as that of an Individual. Though this case does not directly bear upon the present question, it is interesting inasmuch as their Lordships make a distinction between house property, which is part of the estate owned by the joint family under the Mitaksrara law, and interest income derived by the assessee otherwise than from the impartible estate which in the view of the Privy Council, was assessable only in the hands of an individual.

8. The extent to which a coparcenery may be deemed to exist was considered by the Supreme Court in K.V Deshpande v. Dhruwaraj 1961-2 SCJ 582 : (AIR 1962 SC 59). The case arose out of the claims of an adopted son seeking to divest collaterals or heirs of collaterals who had succeeded to the sole surviving coparcener. Their Lordships state that a coparcenery continues to exist so long as there is in existence a widow of a coparcener capable of bringing into existence a son by adoption, and if the widow had made an adoption, the rights of the adopted son are the same as if he had been in existence at the time when his adoptive father had died and his title as coparcener prevails as against the title of any person claiming to succeed as heir of the last surviving coparcener. Dealing with the principle of relation back, they observed that the estate may be definite and ascertained, as when he is the sole and absolute owner of the properties, or it may be fluctuating, as when he is a member of a joint Hindu family, in which the interest of the coparceners is liable to Increase by death or decrease by birth. These observations have been relied upon to a certain extent by the learned counsel for the assessee who contends that though there may not be any widow of a coparcener capable of bringing a new member into the family by adoption, nevertheless, if even the assessee himself should make an adoption, it would Introduce a new coparcener Into the family unit, thereby maintaining the coparcenery in existence. It is argued that the ownership even by the last surviving coparcener is limited by such possible incidents and that, therefore, the assessee in the present case, though he is the sole surviving coparcener, must be deemed to hold the estate as the estate of the joint family, and that his status should be that of an undivided Hindu family for purposes of assessment. We are unable to agree with this somewhat broadly stated proposition. It is not denied by the learned counsel that in so far as the present assessee is concerned, he is in effect the absolute owner of the estate competent to deal with it as he wishes; that there is in existence no female member, entitled to be maintained; or who is capable of adopting a son to a deceased coparcener; and that even if the assessee himself might introduce a new member into the family by adaption or otherwise, the present full ownership of the property by the assessee cannot be whittled down. Such a new member can become a coparcener of the family entitled to share only in such properties as still remain undisposed of by the assessee as the sole surviving coparcener. To accept the contention of the learned counsel for the assessee would be to project with the present possible happenings in the future which might have an effect upon the right of ownership by the last surviving co-parcener. That the property which at present is the absolute property of the assessee might become joint family property on the introduction of a new member, if such an event should ever happen, does not detract from the nature of the absolute ownership of the property at the present time. If the property as held by the assessee is not burdened by any of the obligations and liabilities to which joint family property is subject, it must necessarily follow that it has to be treated as in no way different from the separate property of the sole surviving coparcener.

9. Our attention has been drawn to Manicka Gounder v. Arunachala Gounder, 1961-2 Mad LJ 483 : (AIR 1962 Mad 103), a judgment of one of us wherein the nature of the interests taken by a widow under the Hindu Women's Rights to Property Act was considered. The head note is in these terms:

“The death of the last surviving coparcener in a Hindu joint family lets in the law of inheritance and succession, if he died Intestate. There can be no passing of property by survivorship to another coparcener, as the deceased was the last coparcener. But the person who inherits the property from the last coparcener can take it subject only to the rights of the female members of the family acquired under the Act of 1937, before the death of such coparcener. The fluidity of the share of the female member can subsist only so long as there is scope for survivorship to operate, that is, so long as the coparcenery subsists. The female member is not a coparcener and she cannot therefore claim any property by right of survivorship. Once the coparcenary terminates by the death of the last surviving coparcener and his property passes on to another by Inheritance, while the female member's vested rights under the Act are in no way defeated, she cannot prevent the operation of the law of Inheritance and aspire to be placed in the position of the next heir of the last propositus.”

We are unable to see to what extent the decision in the above case can advance the contentions of the assessee. It is true that there are certain observations which suggest that the coparcenary continues till the death of the sole surviving coparcener. But these observations were made in the context of the right of a widow of a predeceased coparcener under the Hindu Women's Rights to Property Act and the evaluation of the extent of that Interest. This decision cannot be taken to lay down the proposition that the ownership of the estate by the last surviving coparcener, even in the absence of any widows entitled to any claims against the estate, would still fall short of full and absolute ownership, or that it can be deemed to continue to be joint family property, thereby conferring the status of a joint Hindu family upon the sole surviving coparcener.

10. The Mysore High Court held in Melagiriyappa v. Lalithamma, AIR 1961 Mys 152, that the character of the family property does not change by reason of the fact that it may come to be held by a single male coparcener. The reasoning was that if and when the male coparcener either begets or adopts a son, or the widow of a deceased coparcener makes an adoption, the son so born or adopted acquires a right by birth or adoption in that property. In this case again, the right of a female, the widow of one coparcener, under the Mysore Hindu Law Women's Rights Act was in question, and the widow, as the plaintiff in the suit, sought for a share of the properties, challenging at the same time certain alienations effected by the sole surviving coparcener. But these observations of the learned Judges must be confined to a case where there are persons belonging to the family who are capable of introducing a new member into the family-fold. This decision does not to our minds affect the question that we have to consider in the present case.

11. From the above discussion it seems to us that in so far as this assessee is concerned, notwithstanding that the property might become joint family property on the occurrence of certain contingencies, the full rights of ownership enjoyed by the assessee over these properties can in no way be discounted. But if the property continues to possess the character of joint family property, it does not follow that the assessee as the sole surviving coparcener is entitled to be regarded as an undivided Hindu family for purposes of assessment. Even the existence of widows or other female members entitled to maintenance will not, in our opinion, convert the sole surviving coparcener into a Hindu undivided family for the purpose of levy of tax under the Wealth Tax Act.

12. We accordingly answer the first question in the negative and against the assessee.

13. The second question depends upon a construction of the definition of “net wealth” in Section 2(m) of the Wealth Tax Act. “Net wealth” in short means the amount by which the aggregate value of all the assets belonging to the assessee on the valuation date, including the assets required to be included in his net wealth as on that date under this Act is in excess of the aggregate value of all debts owed by the assessee on the valuation date. The short point then is whether the estate duty payable by the assessee on the death of his brother Raghunath Rao is a “debt owed by the assessee on the valuation date”. This expression came in for construction in Kothari Textiles Ltd., Madras v. Commr. of Wealth Tax, Madras, T.G No. 210 of 1959, (AIR 1963 Mad 274), where we held that a claim against an estate of an unascertained nature cannot be regarded as a debt owed by the assessee on the valuation date. It is not disputed that in the present case the assessment to estate duty was made long subsequent to the valuation date. There was no doubt the liability under the Estate Duty Act, but that liability was not ascertained or quantified. In the light of our decision in the tax case referred to above, we must hold that the amount mentioned in the second question cannot be regarded as a debt owed by the assesses and cannot, therefore, be deducted from the valuation of the assets. This question is also answered against the assessee.

14. The assessee will pay the costs of the department.

15. Counsel's fee Rs. 250.

CG/S/D.V.C

16. Answers accordingly.