1989 (2) TMI 71

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....he Tribunal have been stated in paragraph 1 of the order of the Tribunal, which are as under: "There was a partial partition and the assessee got 3,010 shares of the said firm which included 2,660 shares which he had thrown into the hotchpotch. The assessee's contention was that he had received these shares in a different capacity, i.e., as karta of the smaller HUF consisting of himself, his wife and children. The Income-tax Officer, however, was of the view that section 64(2)(c) was clearly attracted because the converted property after partition yielded income to the assessee, his spouse and minor children. During the earlier accounting year, the assessee sold these shares for Rs. 8,13,000 and utilised the sale proceeds for purchasing ....

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....dual to include income of spouse, minor child, etc. - . .. (2) Where, in the case of an individual being a member of Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property), then, notwithstanding anything contained ....

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....is received by the spouse or minor child on partition, the provisions of section 64 (2) (c) are not attracted. My attention was drawn to the circular issued by the Central Board of Direct Taxes at the time of amendment of section 64(2). The said circular reads as follows: "16.7. Hitherto, section 64(2) provided that where an individual converts his separate property into property belonging to the Hindu undivided family of which he is a member, then, the income derived from such converted property, in so far as it is attributable to the interest of the individual, his spouse and minor sons in the property of the family, will be assessed in the hands of the individual. The provision, as amended, provides that in such cases the entire in....