COMMISSIONER OF INCOME TAX Vs. CHANCHALBEN

JUDGEMENT

(1.) AT the instance of the Revenue the following three questions of law have been referred to this Court for its opinion by the Tribunal, Ahmedabad Bench 'A', which arose out of its order in ITA No. 1989/Ahd/77 78 for the asst. year 1972 73 :

(2.) THE facts necessary for the present purposes, as found by the Tribunal, may be stated briefly. The assessee is widow of Harilal J. Dudhia. On partial partition of the assets of the HUF of which Harilal J. Dudhia was the Karta, the land bearing Survey No. 224/1 along with shares of Calico Mills and some cash came to be allotted to the assessee. The land had been subject matter of acquisition proceedings. By declaration dt. 14th Aug., 1970, the assessee who was living with her son Natwarlal, Natwarlal's wife and six grandsons purported to throw the subject plot of land to the common hotchpotch of HUF headed by Natwarlal H. Dudhia of which she was a member, and a request for disbursement of the amount of compensation to each member of the HUF in the respective shares, namely 1/9th , was made to the Land Acquisition Officer on 3rd Oct., 1970. The award was made on 5th April, 1971, determining the compensation. The assessee did not offer any amount for being taxed under the head capital gains. Her case was that she had only 1/9th share in the land after the same was blended with the common hotchpotch of the HUF on 1st Aug., 1970, and on repartition under partition deed dt. 18th Aug., 1970. She received only 1/9th share in the compensation given by the Government. The amount of compensation which fell to her share did not result in capital gains to the extent it could attract taxable liability after the amount of compensation was adjusted against the cost of acquisition and the deduction under S. 80T. The claim of the assessee was rejected by the AO by holding that female's right in respect of blending properties is not at par with coparcener's right. According to the Assessing Officer (AO) a female member cannot throw her property into the common stock by mere declaration as a coparcener could and, therefore, in law, notwithstanding her declaration dt. 14th Aug., 1970, and second partition dt. 18th Aug., 1970, she continued to remain the absolute owner of the land in question and the capital gains having arisen as a result of the said acquisition she alone is liable to capital gains arising on account of such acquisition in its entirety. He made addition of Rs. 1,24,949 on account of long term capital gains in the hands of the assessee.

(3.) HAVING heard the learned counsel for the parties we are of the opinion that the Tribunal clearly erred in making the order which it had made.