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Issues Involved:
1. Whether the Tribunal was correct in law in holding that there was no partition amongst all the four members of the HUF. 2. Whether the Tribunal was correct in holding that there was only a partial partition between one member and the other three members of the HUF. 3. Whether the Tribunal was correct in law in holding that the whole of the capital gains arising out of the sale of the property is includible in the hands of the assessee-HUF. Detailed Analysis: Issue 1: Partition Amongst All Four Members of the HUF The court examined whether there was a complete partition among all the members of the HUF. The Tribunal had held that there was no partition among all four members. The court analyzed the deed of partial partition dated June 5, 1969, which involved the distribution of the Saraspur property. The deed indicated that Vikram received Rs. 20,000 as his share, which was equivalent to his one-fourth share in the property. The court concluded that this transaction effectively resulted in a complete partition of the Saraspur property among the four members, as each member's share was defined and Vikram was paid off. Thus, the court found that the Tribunal erred in holding that there was no partition among all four members. Issue 2: Partial Partition Between One Member and the Other Three Members of the HUF The Tribunal had held that there was only a partial partition between Vikram and the other three members. The court found it unnecessary to address this issue separately because it had already determined that there was a complete partition concerning the Saraspur property. The deed of partial partition clearly indicated a division of shares, making the property no longer a part of the HUF's assets. Therefore, the court did not provide a separate answer to this question. Issue 3: Capital Gains Includible in the Hands of the Assessee-HUF The Tribunal had held that the capital gains from the sale of the Saraspur property should be assessed in the hands of the assessee-HUF. The court disagreed, noting that once the partial partition was effected, the Saraspur property ceased to be owned by the HUF. The court referred to the Supreme Court's decisions in *Girijanandini Devi v. Bijendra Narain Choudhary* and *Joint Family of Udayan Chinubhai v. CIT*, which clarified that partition involves defining the shares of the coparceners and that the property ceases to be part of the HUF once partitioned. The court concluded that the capital gains could not be assessed in the hands of the HUF, as the property was no longer owned by the HUF after the partition. Conclusion: - Question 1: Answered in the negative, in favor of the assessee and against the Revenue. - Question 2: Not necessary to answer. - Question 3: Answered in the negative, in favor of the assessee and against the Revenue. The Commissioner was ordered to pay the costs of the reference to the assessee.
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