1986 (12) TMI 66 - AT - Income Tax

Summary

Issues:
1. Claim of partial partition under section 171 of the Income Tax Act.
2. Rejection of claim by the Income Tax Officer (ITO) and Appellate Authority Commissioner (AAC).
3. Lack of physical division of property as per Explanation (a) under section 171.
4. Opportunity for the assessee to re-examine a witness.

Analysis:

The judgment deals with an appeal regarding the claim of partial partition under section 171 of the Income Tax Act. The assessee asserted that a partial partition occurred in the family, where certain properties were allocated to different members. The Income Tax Officer (ITO) and the Appellate Authority Commissioner (AAC) rejected the claim, citing reasons such as the absence of physical division of properties and non-recognition of the partition due to the timing after 31st December 1979. The AAC did not specify the date of the partition, leading to a dispute. The assessee contended that they were not given an opportunity to re-examine a crucial witness, creating doubts about the decision-making process.

Upon review, the Tribunal acknowledged the uncontroverted affidavits of family members and the lack of opportunity for the assessee to clarify certain aspects with a witness. Considering these factors, the Tribunal set aside the AAC's order and remanded the issue back to the ITO for a fresh determination, emphasizing the importance of affording a fair chance to the assessee for re-examination. Ultimately, the appeal was allowed for statistical purposes, highlighting the need for procedural fairness and thorough examination in tax-related disputes.