COMMISSIONER OF INCOME TAX Vs. VAJULAL CHUNILAL HUF

JUDGEMENT

(1.) ALL these four references arise out of the same set of facts and are inter related. The order of the ITO in Ref No. 287 of 1975 is by way of protective assessment in case the Department loses in the case out of which Ref. No. 71 of 1976 arises. Similarly, I.T. Ref. No. 5 of 1976 is also in connection with the same transaction out of which IT Refs. Nos. 70 and 71 of 1976 arise. Hence, all these four matters are being disposed of by this common judgment. In IT Refs. Nos. 70 and 71 of 1976, two questions have been referred to us, one at the instance of the assessee and the other at the instance of the Revenue for our opinion. Question No. 1 is :

(2.) THIS question has been referred to us at the instance of the assessee. The second question is :

(3.) THE assessee HUF applied to the ITO under s.171 for recognition of the partial partition regarding this particular asset, but the ITO rejected that application on the ground that the partition was not valid and genuine. As regards the question of capital gains, the ITO held that the land was non agricultural land at the date of sale and he, therefore, held that the amount of capital gains worked out by him should be included in the assessable income of the assessee HUF. Against these two decisions of the ITO, one under s.171 and the other on the question of capital gains, two appeals were filed by the assessee and the AAC dismissed both the appeals. The assessee took the matter in further appeal to the Tribunal. The Tribunal held that the partition was a valid partition but it held that the land was non agricultural land on the date of sale, that is, on May 8, 1968, and hence we have got two questions before us, in Refs. Nos. 70 and 71 of 1976, and, as we have pointed out earlier, the question regarding partition having been held to be valid is at the instance of the Revenue and the question as to whether the land was non agricultural land or not, therefore, on the question of capital gains, is at the instance of the assessee. In Ref. No. 287 1975, the question that is referred to us is at the instance of Devidas Sunderlal, the individual, the brother to whom the land was given by the partition of May 8. 1968. As we have pointed out, the assessment of the capital gains in the hands of Devidas Sunderlal is by way of protective assessment and if the partition is held to be valid, the amount of capital gains would be in the hands of Devidas Sunderlal and the question would have to be determined in his individual assessment whether the land sold by him on May 8, 1968, to Kalpana Co operative Housing Society after obtaining the land on partition from the rest of the coparceners, was agricultural land or not and the question that has been referred to us in IT Ref. No. 287 of 1975 is :