COMMISSIONER OF INCOME TAX Vs. VIMAL KUMAR SURANA

JUDGEMENT

(1.) BY the court : The following question has been referred for the opinion of this Court:

(2.) THE assessment year involved is 1977-78. For the year, the assessee-HUF filed an income-tax return on 29th June, 1977 declaring the income at Rs. 44,969 including therein, inter alia, income from interest from M/s Mannalal Nirmal Kumar Surana & Co. THE income was assessed accordingly. THEreafter on perusal of the record, CIT has issued the order under s. 263 of the IT Act to show- cause as to why the order of the ITO should not be revised as that order is prejudicial to the interest of the Revenue so far as the investment is made by the assessee in the firm namely, M/s Mannalal Nirmal Kumar Surana & Co. and become a partner. After show-cause notice and considering the reply, the CIT has taxed the contribution made by the assessee, in the form of precious stones as transfer within the meaning of s. 2(47) of the IT Act and held that it is liable to capital gain tax.