COMMISSIONER OF INCOME TAX Vs. KANTILAL AMBALAL HUF

JUDGEMENT

(1.) A HUF of Ambalal Shivlal consisted of two coparceners one of whom was Kantilal Ambalal. There was a partial partition of the HUF of Ambalal Shivlal on March 30, 1970. At this partition, lands bearing Survey Nos. 296 and 386/2 of Vadaj were allotted to Kantilal Ambalal. The HUF of Kantilal Ambalal consisted of Kantilal Ambalal, the Karta, his wife and his two minor sons, Kamalesh and Pradeep. On the partial partition of the properties of the HUF of Ambalal Shivlal, as aforesaid, the lands bearing Survey Nos. 296 and 386/2 of Vadaj became the properties of the HUF of Kantilal Ambalal.

(2.) A notification dt. January 15, 1970, was issued by the State Government under S. 4 of the Land Acquisition Act for the acquisition of the aforesaid lands bearing Survey Nos. 296 and 386/2 of Vadaj for the Gujarat Housing Board. After the partial partition as aforesaid, the HUF of Kantilal Ambalal entered into an agreement with the Gujarat Housing Board on May 5, 1970, for the transfer of the lands bearing Survey Nos. 296 and 386/2 of Vadaj at the rate of Rs. 17.75 per sq. yd. On September 24, 1970, there was a partial partition of the properties of HUF of Kantilal Ambalal and, under this partial partition, lands admeasuring 2,518 sq. yds. out of 3,146 sq. yds. of Survey No. 296 and 3,034 sq. yds. out of 10,043 sq. yds. of Survey No. 386/2 were divided. The lands, as aforesaid, were divided amongst the aforesaid members of the HUF, namely, Kantilal Ambalal, his wife and his two minor sons. These very lands were the subject matter of acquisition and for which the HUF had entered into agreement with the Gujarat Housing Board, as aforesaid. The Land Acquisition Officer gave a consent award in respect of the said lands on October 20, 1978, and the possession of the lands was handed over to the acquiring body, namely, the Gujarat Housing Board.

(3.) KANTILAL Ambalal invested his share in the compensation amount received for the acquisition of the lands bearing Survey Nos. 296 and 386/2 in the firm of Kirtikumar Trikamlal and Bros. and became a partner in this firm. Since, according to the ITO, the partial partition was not valid, he held that the amount which Kantilal Ambalal had invested in the firm of Kirtikumar Trikamlal and Bros. was not his individual money, but money belonging to the HUF and, therefore, the share of profit received from the said firm was assessable in the hands of the HUF. In this view of the matter, he included the share income received by Kantilal Ambalal from the firm of M/s Kirtikumar Trikamlal and Bros. in the hands of the Hindu undivided family of Kantilal Ambalal (the assessee).