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Kallappa Kadappa Desai Vs. Agricultural Income-tax Officer, Belgaum - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 1264 of 1960
Judge
Reported in[1964]51ITR201(KAR); [1964]51ITR201(Karn)
ActsMysore Agricultural Income Tax Act, 1957 - Sections 2(1)
AppellantKallappa Kadappa Desai
RespondentAgricultural Income-tax Officer, Belgaum
Appellant AdvocateK.S. Srinivasa Iyer, Adv.
Respondent AdvocateD.M. Chandrasekhar, Adv.
Excerpt:
..... - ' 4. quite clearly, this provision does not apply to the facts of the present case. but a consolidated rent might have been fixed taking into consideration both the commercial crops as well as the non-commercial crops......that the rent or the revenue in question is derived from a land which is primarily used for growing commercial crops then that rent or revenue could be taken into consideration. the fact that in that land some other crops are subsidiary grown either as a measure of inter-spacing or for the purpose of giving the required rest to the soil is not a relevant matter. the question for decision before him is whether that land is used for growing all or any of the commercial crops. in a leasehold, a portion of the land might have been used for growing commercial crops; the remaining portion might have been used for raising non-commercial crops; but a consolidated rent might have been fixed taking into consideration both the commercial crops as well as the non-commercial crops. in other.....
Judgment:

1. In this petition the validity of the order passed by the Agricultural Income-tax Officer, Belgaum, in No. BG/A-19-91-106 of 1959-60 dated September 23, 1960, is assailed on two grounds.

2. Firstly, it is urged that the order in so far as it took into account the agricultural income of the son of the petitioner is opposed to law. The second ground urged is that in determining the agricultural income of the petitioner, the Agricultural Income-tax Officer could not have taken into consideration the entire received by the petitioner from his tenants, i.e., both in respect of lands used for commercial crops and lands used for growing non-commercial crops.

3. Dealing with the first point, the Agricultural Income-tax Officer thought that the income of a land belonging to a minor son of the petitioner, which land is managed by the petitioner and the minor son living with him, is an income that could be taken into consideration in computing the total income of the petitioner under section 10 (2) of the Mysore Agricultural Income-tax Act, 1957. This view of the officer does not appear to be correct. Section 10 (2) (a) says :

'Save as provided in sub-section (1), if a person holds land from which agricultural income is derived partly for his own benefit and partly for the benefit of others or wholly for the benefit of others, agricultural income-tax shall be assessed on the total agricultural income derived from such land at the rate which would be applicable if such person had held the land exclusively for his own benefit.'

4. Quite clearly, this provision does not apply to the facts of the present case. The land in question is said to be of the ownership of the minor. Unless that land comes within the mischief of section 11 (2) of the Mysore Agricultural Income-tax Act, the agricultural income in respect of that land would be governed by the provisions contained in section 10 (1) (b). But if, on the other hand, that land had been transferred directly or indirectly to the minor by the petitioner otherwise than for adequate consideration, then the income of the land could be taken into consideration in computing the total agricultural income of the petitioner. The Agricultural Income-tax Officer has not examined this question from the angle in which it had to be examined. He has to first see whether the land in question had been transferred directly or indirectly in the name of the minor by the petitioner otherwise than for adequate consideration. If he comes to the conclusion that it has been so done, then he could take into consideration the income of that land, to the extent it is permissible under the Act, in determining the total agricultural income of the petitioner. If, on the other hand, he comes to the conclusion that the land belongs to the minor and is not in any manner hit by section 11 (2) of the Act, then the provision that has to be applied is the one mentioned in section 10 (1) (b).

5. The other and the more important objection taken by Sri K. S. Srinivasa Iyer, the learned counsel for the petitioner, is that the Agricultural Income-tax Officer preferred to ignore the definition of agricultural income found in the Agricultural Income-tax Act and follows the direction said to have been issued by the Government. 'Agricultural income' is defined in section 2 (1) (a) thus :

'2. (1) (a) 'Agricultural income' means - (1) any rent or revenue derived from land which is used for growing all or any of the commercial crops and is either assessed to land revenue in the State or subject to a local rate assessed and collected by officers of the State Government as such;....'

6. Before an income can be considered as 'agricultural income' it is necessary that the income in question must have been derived either as rent or revenue from land which is used for growing all or any of the commercial crops. For the present purpose it is only that income that comes within the ambit of the expression 'agricultural income'. The first thing that the Income-tax Officer has to do is to decide the predominant characteristic of the land the income of which is taken into consideration. If he comes to the conclusion that the rent or the revenue in question is derived from a land which is primarily used for growing commercial crops then that rent or revenue could be taken into consideration. The fact that in that land some other crops are subsidiary grown either as a measure of inter-spacing or for the purpose of giving the required rest to the soil is not a relevant matter. The question for decision before him is whether that land is used for growing all or any of the commercial crops. In a leasehold, a portion of the land might have been used for growing commercial crops; the remaining portion might have been used for raising non-commercial crops; but a consolidated rent might have been fixed taking into consideration both the commercial crops as well as the non-commercial crops. In other words, distinct portions of a leasehold might have been used for growing commercial crops and equally distinct portions of that leasehold might have been used for growing non-commercial crops. In such a case, though one consolidated rent is fixed, the Agricultural Income-tax Officer has to apportion that rent between those portions that are used for growing commercial crops and those portions that are used for raising non-commercial crops. What the Agricultural Income-tax Officer can assess in only the rent derived from the land that is used for growing commercial crops. The unity or the integral character of the rent stipulated is not relevant in the matter of determining the rent derived from the land, that is, for raising commercial crops. On a plain reading of section 2 (1) (a) (i), it appears that the intention of the legislature was to take into consideration only that land which is used for raising commercial crops during the relevant assessment year. It is the rent of that portion of the land that is relevant for the purpose of computing the agricultural income.

7. For the reasons mentioned above, we are of the opinion that the order, which is the subject-matter of challenge in this writ petition, is an illegal order and the same has to be quashed. It is ordered accordingly. It is open to the Agricultural Income-tax Officer to take fresh steps to assess the petitioner according to law in the light of this decision. No costs.


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