2024 (7) TMI 1046

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....this appeal. 2. Brief facts of the case are that the assessee along with his mother and six brothers and sisters succeeded to the property, originally purchased by his father late Shri Mohan Lal Ramani vide Registered Sale Deed dated 14/12/1965, on the demise of his father on 22/03/1995. Subsequently, a suit for Partition was filed vide O.S. No. 2829/2010 on the file of the First Additional Senior Civil Judge, City Civil Court Hyderabad. During the pendency of the suit, on demise of assessee's mother on 28/08/2011, under the will of mother, the assessee became the owner of her 1/8th share of the property also. Subsequently, a compromise decree was arrived and the civil court directed the assessee to pay Rs. 102.50 lakhs to six co-own....

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....ined market value of the property as pleaded by the assessee and on that aspect, assessee has no dispute. 5. Aggrieved by the findings of the learned CIT(A) in respect of the treatment of the capital gains relatable to the 6/8th shares as short term capital gains, assessee preferred this appeal. The sole issue in this appeal, as argued by the learned counsel, therefore, is whether there is any transfer of property from the other co-sharers to the assessee in respect of such 6/8th share on the assessee paying Rs. 102.50 lakhs within the meaning of Section 45 / 47(i) of the Act? 6. Learned AR, in support of his contention that partition among family members does not constitute transfer, placed reliance on the decisions in the cases of C....

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....reached its logical end and, therefore, the compromise decree resulted in the assessee acquiring the shares of others. However, this understanding is incorrect. With the passing of the preliminary decree and for that matter, with the passing of any final decree, the partition does not reach its logical conclusion. It is only with the allottees of the shares putting in possession of the respective property, the partition is complete. Till then, the shares themselves are liable to be varied on account of the intervening events, if any. Whatever the directions that the civil court gives and whatever the payment that would be made by the parties to each other or the variances in the size of shares by metes and bounds, till the partition proceed....