NARAYAN NEPAK Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ON the assessee's application under Section 256(2) of the I.T. Act of 1961 (hereinafter referred to as "the Act"), this court directed the Income-tax Appellate Tribunal, Cuttack Bench, to state a case and refer the following question for the opinion of the court :

(2.) THE relevant assessment years are 1973-74 and 1974-75. THE assessee, an individual, was previously assessed in the status of an HUF in respect of the share income earned by the joint family from a firm known as M/s. Sri Narayan Bastralaya. THE previous year for the assessment year 1973-74 was the calendar year 1972 ending on December 31, 1972. On December 31, 1971, there was a partial partition in the HUF in respect of the interest of the family in the firm and as a result of such partition, each of the seven members of the family got 1/7th share in the hitherto HUF interest in the firm. In the course of the assessment for 1973-74, a claim for partial partition was made and the ITO accepted the claim by passing an appropriate order under Section 171 of the Act on 30th of March, 1974. THE seven members of the HUF applied to be admitted as partners with individual status in the firm. That application was, however, refused. THErefore, in the books of the firm, the capital hitherto standing in the name of the HUF continued to stand in its name and the share of profit used to be credited to the single account as before.

(3.) I agree.