Law:

Section:

Section 48 of the income-tax act, 1961-Capital gains-Computation of-Certain property was allotted to assessees under a partition deed-Deed conferred a right of residence on mother of assessees-Subsequently, property was sold and certain sum was paid to mother for relinquishment of her right-Whether tribunal was justified in holding that amount paid to mother should be excluded from computation of capital gains of assessee-Held, on facts, yes Section 256, read with section 48, of the income tax act, 1961-Whether, in view of facts mentioned under the head 'capital gains-computation of, a referable question of law arose from tribunal's order-Held, on facts, no Facts A property was allotted to the assessees, who were brothers, under a deed of partition. The partition deed conferred a right of residence in the property in favour of the mother of the assessees. Subsequently, the property was sold. The assessees claimed deduction of a certain sum on the ground that they had paid this amount to their mother for relinquishment of her right of residence in the property sold, in order to obtain a fair and reasonable price. The ITO allowed the assessee's claim but, acting under section 263, the Commissioner set aside the ITO's order. The Tribunal, however, held that the money received by, the mother was for extinguishment of her right of residence in the property and that it could not be included in the computation of capital gains by the assessees. It, therefore, allowed the assessee's claim. On application under section 256(2) : Held When the interest of the mother in the property had been purchased by getting a relinquishment for a certain consideration, the said sum could not be taken to be a part of the consideration received by the assessees in respect of their interest in the property. The payments made to the sons towards their interest in the property alone could be taken for the purpose of computation of the capital gains. The Tribunal was, therefore, right in its conclusion that the sum paid to, the mother should be excluded in computing capital gains in the hands of the assessees. Accordingly, there was no ju stification to direct a reference in this case. TAX…

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