KESHRIMAL BAPULAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal, Indore Bench, has referred the following question, stated to be question of law, arising out of its order dt. 29th May, 1989 for the opinion of this Court :

(2.) FACTS , briefly stated, giving rise to this reference, are that the assessee is a HUF. It divided capital of the family business aggregating Rs. 1,25,112 on 21st Oct., 1979 and claimed it as a family arrangement in the asst. yr. 1980-81. It was also claimed that this amount had gone out of the family's hold due to family arrangement which was not a partial partition and as such, no order under S. 171(3) of the IT Act, 1961 ('the Act') was necessary. It was further asserted that S. 171 (3) which derecognised partial partition w.e.f. 31st Dec., 1978 also did not apply to the case. This position was accepted by the AO but was ordered to be revised by the CIT under S. 263 of the Act requiring the ITO to make a de novo assessment by treating the claimed family arrangement as partial partition. The assessee took appeal before the Tribunal against this but failed. Resultantly, the ITO framed fresh assessment rejecting the stand of the assessee that it was a family arrangement. The assessee again took appeal and ultimately the Tribunal held by order dt. 2nd Jan., 1987 that such a family arrangement was a partial partition.

(3.) THE assessee again took appeal against this order but in vain. While dealing with its appeal the Tribunal in its order dt. 28th Feb., 1992 also recorded the finding that reopening of the assessment for the asst. yr. 1981-82 under S. 143(2)(b) was valid. This gave rise to the point in issue and the present reference on the question stated hereinabove.