COMMISSIONER OF INCOME TAX Vs. RAMADHAR

JUDGEMENT

(1.) For the assessment year 1964-65, the following question has been referred to us by the Income Tax Appellate Tribunal :

(2.) The controversy in this case was concerned with whether the assessed, whose name is Shri Ramadhar was entitled to the gain resulting from acquisition of land situated in Bagh Majlis Sarai situated at village Wazirpur, Delhi, or whether that gain was to go to the firm, M/s. Ramadhar and Company, of which he was a partner. The facts were that a firm of this name which had six partners, originally purchased the land for a sum of Rs. 10,740 on April 9, 1957. This firm was a coloniser and dealing in purchase of land and conversion into plots and sale of the same. The firm was dissolved on May 4, 1962, and thereafter the assessed himself became its sole proprietor. On December 1, 1962, a new firm was constituted of which Ramadhar was also a partner. This had four partners. It so happened that the land which was acquired and for which compensation was granted was acquired under Award No. 1430 which was signed on November 9, 1962, but announced on December 15, 1962.

(3.) The controversy which arose was whether the gain of Rs. 95,935 resulting from the acquisition of the land was to be assessed in the hands of the assessed because he was the sole proprietor on November 9, 1962, or whether it was to be assessed in the hands of the firm which had taken over the business on December 1, 1962, which was before the announcement of the award on December 15, 1962.