Chandra Reddy, C.J:— The two questions of law that are referred to this Court under section 64(1) of the Estate Duty Act by the Central Board of Revenue are:
(1) Whether on the facts and in the circumstances of the case, there was evidence to justify the addition of Rs. 10,000 as the value of jewellery in the estate of the deceased? and
(2) Whether on the facts and in the circumstances of the case, there was evidence to justify the inclusion of the garden at Tooli Chowki in the estate of the deceased?
2. The facts giving rise to this reference are these. One Shankar Rao Jadhav who was a Civil Surgeon under the Government of Hyderabad, died on 9th October, 1956, survived by his widow Shantabai, the applicant in the present reference, and eight children and considerable property. The widow and some of her children, who were accountable persons within the terms of sub-section (1) of section 53 of the Act, filed an account of the estate before the Assistant Controller of Estate Duty, Hyderabad, declaring the principal value thereon at Rs. 88,115. The Assistant Controller, however, determined the principal value of the estate at Rs. 2,10,002. In arriving at the principal value of the estate, he included the following two items of assets:
(i) Rs. 10,000 as the value of the jewellery in the possession of the deceased at the time of his death; and
(ii) Rs. 35,000 as the value of the garden at Tooli Chowki belonging to the deceased, but standing in the name of the wife, Smt. Shantabai.
3. As regards the first item, the applicant had not disclosed any amount towards the value of jewellery left by the deceased in the account of the estate filed by her, The Assistant Controller thought that the first item should be added to the estate of the deceased as it was liable to estate duty in view of the fact that the deceased had admitted possession of jewellery of the value of Rs. 10,000 in the statements of wealth as on 1st April, 1954 and 31st March, 1955, filed by him before the Income-tax Officer in connection with his income-tax assesment. Regarding this item, the widow stated that there was very little jewellery and that too belonged to the ladies in the family. The Assistant Controller refused to accept the statement, and added a sum of Rs. 10,000 as the value of the jewellery.
4. As regards the second item, indisputably the sale deed stands in the name of Shantabai. The finding of the authorities concerned in this behalf was that the consideration was furnished by Shankar Rao, and he also treated it as his own in the statement of wealth by including it in his assets. The case of the widow Shantabai is that she purchased the property with money belonging to her, and that at any rate, if for any reason it was found that she had no stridhana property which could be utilised for the acquisition of the property in dispute the husband should be demed to have made a gift of it to her. This claim was rejected by the Assistant Controller, as the case of gift was quite contrary to the purchase of the property, and that there was absolutely nothing to show that the deceased intended either the purchase money or the property itself as a gift to the applicant.
5. The two questions that arise for consideration are: (1) Whether the Assistant Controller was justified in adding Rs. 10,000 as the value of the jewellery to the estate of the deceased? and (2) Whether the inclusion of Rs. 35,000 being the value of the garden, in the estate of the deceased is justified?
6. As regards the first asset, it is proved that the jewellery was comprehended in the wealth statements of Shankar Rao which were filed by him on 1st, April, 1954 and 31st, March, 1955 before the Income-tax Officer. Then the question remains whether Shankar Rao died possessed of jewellery valued at Rs. 10,000. It is not disputed by the counsel for the Central Board of Revenue that the Assistant Controller has to decide whether these jewellery were in existence as the property of the deceased Shankar Rao at the time of his death. The fact that a year and a half before his demise, jewellery of the value of Rs. 10,000 existed does not by itself establish that the continued to be the owner of these jewellery at the time of his death. So, the question has to be considered as on the date of the death of Shankar Rao. So, this has to go back for a decision in the light of what is stated above.
7. Coming now to the second item, in the opinion of the Assistant Controller, Shantabai, the widow, failed to establish that the sale price came out of her stridhana property and that the had no ostensible resources for the purchase of the property, and that her husband treated this property as his own in the statements of wealth. But, that is not conclusive of the matter when the property stands in the name of his wife. Even assuming that the money for the purchase was found by her husband, it does not mean that the had beneficial interest in the property. Normally, a husband takes a sale in the name of his wife either to make a provision for her or to screen the property from creditors, i.e, to keep it beyond the reach of the creditors. Whatever might be the motive, so long as the deed stands in the name of another person, it could not be said that it was competent for the deceased to dispose of the property. Section 6 of the Estate Duty Act enacts that property which the deceased was at the time of his death competent to dispose of shall be deemed to pass on his death. It is thus manifest from the section that estate duty could be levied in respect of properties which could be disposed of by the deceased at the time of his death.
8. Mr. Kondiah urged that the wife herself could not have alienated the properties by herself and that any disposition by her would not pass title to such purchaser having regard to the fact that it was open to the husband to impeach the sale sometime later on the grond that the beneficial interest always vested in him, the consideration having been paid by him. This argument ignores the provision of section 41 of the Transfer of Property Act.
9. Be that as it may, so long as the document stands in the name of his wife, he could not dispose of the property. It is true it was open to him to have obtained a declaration that he was the beneficial owner thereof notwithstanding the fact tha his wife was the ostensible owner. But, so long as the husband does not have any recourse to those proceedings for obtaining such a relief, he would not have been in a position to dispose of the property standing in the name of a third persons as his own. This proposition is not contested on behalf of the Central Board of Revenue.
10. But Mr. Kondiah relies upon section section 3(1)(b) of the Estate Duty Act which says:
“Fur the purposes of this Act,—
(b) a disposition taking effect out of the interest of the deceased shall be deemed to have been made by him, whether concurrence of any other person was or was not required”.
11. We do not think this section comes to the rescue of the Central Board of Revenue. It is to be borne in mind that the sale deed was taken more than two years before his death. That being so, even section 9 of the Act does not render any assistance to the Central Board of Revenue.
12. It follows that the sum of Rs. 35,000 representing the value of the garden could not be added to the estate of Shankar Rao.
13. The reference is answered accordingly. The applicant will get costs of this reference. Advocate's fee Rs. 100.
14. Answered accordingly.