Govinda Bhat, C.J.

1. The Income-tax Appellate Tribunal, Bangalore Bench, has stated a case under section 256(1) of the Income-tax Act, 1961, (hereinafter called "the Act"), and referred the following question of law for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that there were no capital gains arising to the assessee on the sale of property for the assessment year 1964-65 ?"

2. The assessment is for the year 1964-65 and the relevant accounting year is the year ending on December 31, 1963. The assessee is a Hindu undivided family. Sri M. Ranga Pai is the karta of the said family. His father, M. Ventkatesha Pai, purchased a house property in Mangalore Town from Manel Raghunatha Naik for a sum of Rs. 25,000 on March 25, 1950. Venkatesha Pai died in the year 1951, and Manel Raghunatha Naik died some time thereafter. In the year 1963, the assessee reconveyed the said property to Manel Mukunda Naik, son of Manal Raghunatha Naik, for the same consideration amount of Rs. 25,000. According to the assessee, the reconveyance was done in accordance with the oral understanding between the parties to t