- (1.) THE assessee, a Hindu undivided family, owned two plots of land, one measuring 1,320 square yards on Mall Road, Karnal, and another plot measuring 6,000 odd square yards on Railway Road, Karnal. On October 22, 1970, an oral partition of these plots was said to have been made by the members of the Hindu undivided family. A memorandum of partial partition to this effect was later executed on November 16, 1970, and thereafter, on August 11, 1971, the two plots on the Mall Road, Karnal, were sold and the sale proceeds of these plots were credited to the accounts of the members of the Hindu undivided family on August 13, 1971. In the context of the liability for payment of capital gains tax arising from the sale of the two plots on the Mall Road, Karnal, the question that arose was with regard to the date on which this partial partition relating to these plots took place. The Income-tax Officer as also the Tribunal held that the date of this partial partition was August 13, 1971, the day on which the sale proceeds of the sale of the plots were distributed amongst the members ot the Hindu undivided family. This is the factual background leading to the following questions being referred to this court for its opinion : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that there was partial partition, qua the plots of land at Mall Road, Karnal, and the plot of land at Railway Road, Karnal, owned by the assessee-Hindu undivided family only on August 13, 1971 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the immovable property (plots) in question admitted of physical division as contemplated by the Explanation (a) (i) to Section 171 of the Income-tax Act, 1961, by an apportionment and equalisation by payment ?"
(2.) AS regards question No. (ii), on the specific request of counsel for the assessee, this is returned unanswered. Further, again at the request of counsel for the assessee, the words "and the plot of land at Railway Land, Karnal" are hereby deleted from question No. (i ). "
(3.) COMING now to the point in controversy, it will be seen that the matter regarding assessment after partition of a Hindu undivided family is covered by the provisions of Section 171 of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ). What is relevant here are the provisions of Section 171 (1) and Explanation (a) (i) thereof, which are in the following terms : "a Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family. . . Explanation.--In this section,-- (a) 'partition' means (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition,--";