Law:

Section:

Section 55(2) of the income-tax act, 1961-Capital gains-Computation of-Cost of acquisition-HUF, a money-lender, showed a property as business asset-HUF partitioned on 6-11-1953 and said property transferred to firm, constituted by family members for carrying on same money-lending business-Its value shown right up to 1-4-1964 at Rs. 94,000-On 1-4-1964, property divided between partners when assessee, having 10 per cent share, was allotted some plots and was debited with Rs. 9,400-Assessee sold part property on 15-10-1966 for Rs. 9,000 and did not declare capital gains claiming that cost of acquisition on 1-4-1964 should be taken as its market value as on that date and he had sold land to purchaser at same value - ITO took its cost of acquisition as that in hands of HUF under section 55(2) and computed capital gains tax accordingly-AAC reduced capital gains-Tribunal directed ITO to compute capital gains by taking cost of acquisition as its market value as on 1-4-1964-Whether tribunal right in law-Held, on facts, no Facts An HUF, carrying on money-lending business, owned a property known as "Gokul Bagh", purchased in 1919, showing it as a business asset. On 27-3-1922, a partnership deed was executed between two members of the said family, viz., PG and JD. On 6-11-1953, the HUF was partitioned and PG, JD and the major son of PG executed a partnership deed for carrying money-lending business in the name and style of GJ & Co. The said property was transferred to this firm and was being shown as firm's asset, in its books and balance sheets right up to 1-4-1964, at a value of Rs. 94,000. JD was the karta of the family consisting of himself and his brother AD. As a result of partition of this HUF, a new partnership firm came into existence on 14-11-1959 between PG and his sons on the one hand and JD and his divided brother on the other. In terms of partnership deed, the assessee, GP, was entitled to one-tenth share in the profits and assets of this firm. On 1-4-1964, the property was taken out of the firm and divided between the partners. The assessee was allotted two plots by crediting his account with the sum of Rs. 9,400. The accounts of other partners were also…

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