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TMI Blog1987 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... en place after the enactment of the Hindu Succession Act, 1956, in cases of intestate succession and after December 31, 1969, when the Taxation Laws (Amendment) Act, 1970, had modified the Income-tax Act, 1961 ? (2) If the answer to the first question is in the negative, whether the capital gains on sale of that property be not taxed in the assessee-individual's hands and the interest of the minor sons be not clubbed in the assessee's hands ?" The assessee, Shri K. P. R. Rajah, is an individual deriving income from his own business and as a partner in Messrs. K. P. R. Rajah. For the assessment to capital gains of Rs. 18,850 relating to the sale of a property at No. 2, Venkatesa Mudaliar Street. Madras-81, in the assessment order, the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . R. Rajah and not individually in his hands. Against the order of the Appellate Assistant Commissioner, the Revenue preferred an appeal before the Tribunal which found that the entire property belonged to the Hindu undivided family of the assessee and his sons and that, therefore, no capital gains could be assessed in the hands of the assessee as an individual. It also held that the interest of the minor sons of the assessee could not be clubbed under section 64 of the Income-tax Act, because the particular provision for clubbing came into operation by way of the Amending Act of 1975 which came into force on April 1, 1976, and, therefore, the said amended provision will not apply to capital gains which arose on April 27, 1973. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed partition of the said half share will also come up for charge. It is also contended that the Tribunal is in error in stating that there is no evidence to show that the assessee paid the sum of Rs. 5,000 out of his individual funds, while the Income-tax Officer as well as the Appellate Assistant Commissioner had definitely given a finding that the sum of Rs. 5,000 had been paid out of the assessee's separate funds for getting a release of the half share in the property from his sister. If really the sum of Rs. 5,000 which was the consideration for getting the release from his sister with reference to the half share belonging to her was paid from the separate funds of the assessee and not from his joint family funds, then the half share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily. Thus a finding on the question as to who paid the consideration becomes quite relevant. In this case, the Income-tax Officer specifically finds that Sivakami Ammal released her share in the property in favour of the assessee and his sons for the consideration of Rs. 5,000 received by her from Sri K. P. R. Rajah and that since the release is for a consideration from the assessee individually, the release could be taken only for the benefit of the assessee and not for his sons. The Income-tax Officer also found that the sum of Rs. 5,000 was paid out of the individual income of the assessee. He actually found that the sum of Rs. 5,000 paid for the release had been withdrawn from the individual funds of Sri K. P. R. Rajah and when the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property became the property of the assessee or whether it became the property of the joint family, we are of the view that the Tribunal has to go into the question as to from where the sum of Rs. 5,000 came. Apart from this question which relates to the half share which devolved on the assessee's sister, as regards the half share which devolved on the assessee on the death of his father, the applicability of the Taxation Laws (Amendment) Act, 1970, which came into force on April 1, 1971, has not been considered by the Tribunal. It is not in dispute now before us that the said Taxation Laws (Amendment) Act, 1970, is applicable to the assessment year in question. But the Tribunal has not referred to the said Amending Act and it has not also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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