Skip to content


Shanker Shivalinga Minache Vs. Agricultural Income-tax Officer, Bijapur - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 2371 of 1970
Judge
Reported in[1973]87ITR150(KAR); [1973]87ITR150(Karn)
ActsMysore Agricultural Income Tax Act, 1957 - Sections 19(4)
AppellantShanker Shivalinga Minache
RespondentAgricultural Income-tax Officer, Bijapur
Appellant AdvocateK.S. Srinivasa Iyer, Adv.
Respondent AdvocateP.K. Shyamsundar, Adv.
Excerpt:
.....of payment of commission to agents held, though a tax payer may resort to a device to divert the income before it accrues or arises to him, the effectiveness of the device depends upon its genuineness. the substance of the transaction has to be assessed by applying the taxing statute so as to ascertain whether it is a sham or make believe transaction or one which is genuine and therefore is eligible for deduction under the act. hence, courts have to look into the form of the transaction to find out its substance so as to ensure that there is no avoidance of tax by a method impermissible in law. on facts held, the creation of m/s. r.m.c. as well as m/s. o.m.c (as agencies) was nothing but a device adopted by the appellant for siphoning of the profits of the appellants company in the..........and produced some bills for sale of sugar-cane overruling the objections of the petitioner to the proposed assessment the respondent made an order of assessment determining the total income at rs, 14,018 on which a sum of rs. 766.62 was levied as tax. aggrieved by the said order, the petitioner has preferred the above writ petition. 2. it was urged by k. s. srinivasa iyer, learned counsel for the petitioner, that the order of assessment violates the rules of natural justice. in the proposition notice, the respondent proposed to compute the groundnut yield at five quintals per acre; but in the assessment order he has computed the said yield at 13.6 quintals per acre and the income determined on account of groundnut crop is more than what was proposed to be accessed in the proposition.....
Judgment:

Govinda Bhat, J.

1. The petitioner is an assessee under the Mysore Agricultural Income-tax Act, 1957, hereinafter called 'the Act'. The respondent issued a notice to the petitioner under section 18(4) Requiring him to submit his return of income for the assessment years 1965-66, 1966-67 and 1967-68; but the petitioner did not file any return. Thereafter, the respondent issued a proposition notice under section 19(4) of the Act proposing to assess the petitioner on an income of Rs. 18,825 for the assessment year 1967-68. In the said notice the basis of computation of income is stated. Once of the commercial crops raised by the petitioner is groundnuts. According to the said notice, the area under cultivations was three acres and the yield per acre was five quintals. The petitioner appeared it response to the said notice and produced some bills for sale of sugar-cane Overruling the objections of the petitioner to the proposed assessment the respondent made an order of assessment determining the total income at Rs, 14,018 on which a sum of Rs. 766.62 was levied as tax. Aggrieved by the said order, the petitioner has preferred the above writ petition.

2. It was urged by K. S. Srinivasa Iyer, learned counsel for the petitioner, that the order of assessment violates the rules of natural justice. In the proposition notice, the respondent proposed to compute the groundnut yield at five quintals per acre; but in the assessment order he has computed the said yield at 13.6 quintals per acre and the income determined on account of groundnut crop is more than what was proposed to be accessed in the proposition notice. The learned High Court Government Pleader submitted that the yield at 13.6 quintals of groundnuts an acre was computed on the basis of average taluka yield and that was put to the petitioner's counsel at the time of hearing. The hearing which was given by the respondent was regarding the objections of the petitioner to the proposed assessment on the basis of the proposition notice. There was a no rectification of the a proposition notice and it is not sufficient if at the stage of the hearing of the objections to the proposition notice the petitioner's counsel is told that the assessing authority proposes to increase the yield per acre. In our opinion, the order of assessment made under section 19(4) of the Act, in the circumstances, is violative of the rules of natural justice. Consequently, we allow this writ petition and quash the impugned assessment order dated November 29, 1969. The respondent is at liberty to make fresh order of assessment in accordance with law.

3. No costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //