HARBHAGWAN AND SONS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE assessee, a Hindu undivided family, owned two plots of land, one measuring 1,320 square yards on Mall Road, Karnal, and another plot measuring 6,000 odd square yards on Railway Road, Karnal. On October 22, 1970, an oral partition of these plots was said to have been made by the members of the Hindu undivided family. A memorandum of partial partition to this effect was later executed on November 16, 1970, and thereafter, on August 11, 1971, the two plots on the Mall Road, Karnal, were sold and the sale proceeds of these plots were credited to the accounts of the members of the Hindu undivided family on August 13, 1971. In the context of the liability for payment of capital gains tax arising from the sale of the two plots on the Mall Road, Karnal, the question that arose was with regard to the date on which this partial partition relating to these plots took place. The Income-tax Officer as also the Tribunal held that the date of this partial partition was August 13, 1971, the day on which the sale proceeds of the sale of the plots were distributed amongst the members ot the Hindu undivided family. This is the factual background leading to the following questions being referred to this court for its opinion :

(2.) AS regards question No. (ii), on the specific request of counsel for the assessee, this is returned unanswered. Further, again at the request of counsel for the assessee, the words "and the plot of land at Railway Land, Karnal" are hereby deleted from question No. (i ). "

(3.) COMING now to the point in controversy, it will be seen that the matter regarding assessment after partition of a Hindu undivided family is covered by the provisions of Section 171 of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ). What is relevant here are the provisions of Section 171 (1) and Explanation (a) (i) thereof, which are in the following terms :