COMMISSIONER OF INCOME TAX Vs. BHANDARI B M

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Hyderabad, has referred the following three questions for the opinion of this court :

(2.) WE shall state the relevant facts as they appear from the statement of the case, and the orders annexed thereto.

(3.) THE Judicial Member, however, came to a different conclusion. He held that on the dissolution of the firm, M/s. Dayaram Surajmal, the shares allotted to Lahoti's estate constituted its capital asset, and treating them as capital asset only in the hands of executor, they were sold to the Govt. of Karnataka, as aforesaid. With respect to the 17% of shares,however, the Judicial Member also disagreed with the Commissioner, holding that the theory of mortgage by conditional sale was not correct and that even with respect to these 17% of shares, there was a sale. In view of the difference of opinion between the two Members, the matter was referred to a third Member, the Vice-President of the Tribunal, under s. 255(4) of the Act.