COMMISSIONER OF INCOME TAX Vs. SATISHCHANDRA MODI

JUDGEMENT

(1.) This is an application under section 27(3) of the Wealth-tax Act, 1957, by the Revenue for directing the Tribunal to state a case and make a reference of the following questions of law :

(2.) The assessee was a joint family consisting of father, mother and two minor sons. The assessee set up a case of two partial partitions. The first partial partition was alleged to have taken place on 19/01/1976, and the second to have taken place on 16/10/1978. It was alleged that in the first partial partition, the father, mother and one son by name Sourabh collectively got Rs. 20,000, whereas Soham got Rs. 10,000 individually. Similarly, in the second partial partition it was alleged that the father, mother and another son, Soham, collectively got Rs. 20,000 in their share, whereas the remaining son, Sourabh, got a sum of Rs. 10,000 individually in his name. These partial partitions were not accepted by the Income-tax Department. However, for the purpose of wealth-tax, the Tribunal came to the conclusion that the said partial partitions were genuine and were valid under the Hindu law and accordingly decided the case in favour of the assessee. Being aggrieved, the Revenue made an application before the Tribunal for making a reference of the aforesaid questions of law. The said application was rejected and, therefore, this petition under section 27(3) of the Act has been made for directing the Tribunal to state the case and to make a reference.

(3.) After having heard learned counsel for the parties, we are of the view that the Tribunal ought to have referred the first question to this court under section 27(2) of the Act, as it does give rise to a question of law. The second question proposed does not given rise to any question of law and, therefore, needs no consideration. Accordingly, this application under section 27(3) of the Act is allowed and the Tribunal is directed to state the case and to refer the following question of law to this court :