Law:

Section:

Section 4 of the Income-tax Act, 1961, read with section 6 of the Hindu Succession Act, 1956 - Hindu undivided family - Assessable as - Assessment year 1976-77 - Respondents were legal heirs to immovable property of 'D' which was obtained by 'D' in 1930 by partition - When 'D' died in 1965, names of four legal heirs were entered in City survey records and Municipal records in respect of said property - When that property was sold in 1975, independent final sale deeds were executed in favour of each of four legal heirs separately and each of them paid capital gains - That was accepted by department also - But subsequently, Assessing Officer issued a notice under section 148 holding that capital gains were assessable in hands of HUF and same had escaped assessment - Facts of case clearly showed that HUF was never assessed to tax and on death of 'D', legal heirs had mutually decided amongst themselves as to who shall inherit estate of deceased and got their names recorded in City Survey records and Municipal records - Whether since co-sharers were holding property of deceased as tenants in common, Tribunal was justified in holding that sale was effected by co-sharers individually and not by HUF and that entire capital gain could not be taxed in hands of HUF - Held, yes FACTS 'D' became owner of the immovable property pursuant to the partition deed dated 27-1-1930. The said 'D' died on 7-4-1965. On 12-7-1965, the names of four legal heirs of the deceased were entered in the City Survey records and also in the Municipal records in respect of the aforesaid property. On 5-6-1975, all these 4 legal heirs entered into an agreement for sale of the property. On 20-11-1975, independent final sale deeds were executed in favour of each of the aforesaid 4 legal heirs separately. Each of the legal heirs paid capital gains arising on sale of the said property and the same had been accepted by the Income-tax Department. On 6-10-1979, the Assessing Officer issued a notice under section 148 as he was of the opinion that the capital gains arising on sale of the aforesaid immovable property were assessable in the hands of the HUF and the same had escaped assessment. The Assessing…

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