Srinivasa Iyengar, J.
1. These two revision petitions arise under the Karnataka Agrl. I.T. Act and have been filed challenging the order of the Commr. of Agrl. I.T. passed under S. 35 of the Karnataka Agrl. I.T. Act, 1957.
2. Bhagirathi Bai (petitioner in C.R.P. 1225 of 1977) is the mother of Shantha Bai J. Nayak, the petitioner in C.R.P. 1232 of 1977. These two persons were assessed to agricultural income-tax for the assessment year 1975-76 in the status of individuals. The order of the Commissioner which is impugned in these petitions is a common one. It has been stated therein that Bhagirathi Bai had been held to be non-assessable under S. 19(3) of the Act. This is incorrect. It transpires that for an earlier year the Commissioner had taken action under S. 35 and come to a conclusion that V.P. Shanbhogue and Vasudeva P. Shanbhogue who are brothers, Bhagirathi Bai their mother and Shantha Bai their sister constituted an association of persons and in respect of the lands held by them, they were liable for agricultural income-tax as an association of persons and had made an order to that effect on November 26, 1975. Assessment, in the instant case, by the assessing authority had been made on July 30, 1975. Apparently, following his earlier order dated November 26, 1975, the Commissioner issued notice to revise the assessment for this assessment year also. The petitioners filed their objections contending that the land with regard to which they had submitted their returns belonged to them and there was no association of persons and the proposal to revise the assessment was untenable. The Commissioner, however, overruled the objections and directed the assessment to be made in the status of an association of four persons above named as one unit.
3. The ground on which the Commissioner held that the agricultural income should be brought to tax on an association of persons was that a joint loan of Rs. 3 lakhs had been taken on April 1, 1970, in order to meet a part of the consideration payable for the purchase of the properties by these four persons separately in their names and joint loans in the sums of Rs. 50,000 and Rs. 40,000, for purposes of raising the crops and another joint loan of Rs. 19,500 for purposes of purchasing a tractor had been taken and this indicated a course of conduct of joint activity and realisation of income by the association of persons as such. It had been contended before him that the lands had been purchased separately in the individual names and they were being enjoyed and cultivated separately and separate khatha and ledger account had been maintained for supply of sugarcane and areca and purchase of manure, etc., was also in the individual names and in these circumstances there was no association of persons engaged in a joint venture or realisation of income to an association of persons as such. From the order of the Commissioner, it is seen that none of these factors have been controverted and were in fact not doubted. It has also been pointed out that the tractor had been registered in the name of one V.P. Shanbhogue only and this fact also was not controverted by the Commissioner. But he was of the opinion that all these material factors which would indicate separate ownership and separate realisation of the income and separate activity with regard to the cultivation were 'obviously convenient devices adopted to camouflage certain facts which would be very inconvenient to the assesses when the Agricultural Income-tax Officer looks into their cases'. In our opinion, the view taken by the Commissioner is untenable.
4. In order to find out whether there was a join venture by an association of persons all the facts and circumstances have to be taken into consideration. The mere fact of the loan being taken jointly by four persons would not ipso facto lead to the conclusion that acquisition of properties would be by the persons jointly and would not also lead to an inference that it must be managed by them all as a joint property. The borrowing in the joint names was at best a matter of convenience and possibly at the instance of the advancing bank. Even so all the four would be jointly and severally liable. This would not outweigh the other material facts which clearly indicated that the properties were held and enjoyed separately by four persons.
5. The facts that the properties stood in the individual names, and for the purpose of carrying on the agricultural operations purchases of manure were made separately and supplies of sugarcane and areca had been made separately and accounts had been maintained in the individual names, were circumstances indubitably indicating a course of conduct showing the real intention of the parties that the activities were as individuals and militated against an inference of their being an association of persons.
6. In the case of Commr. of Agrl. I.T. v. M.L. Bagla : 80ITR173(SC) , the Supreme Court had to consider the circumstances under which liability could be imposed as on an association of persons under the U.P. Agrl. I.T. Act, 1948. Under S. 2(p) of the Karnataka Agrl. I.T. Act, 'person' is defined as 'any individual or association of individuals, owing or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes and undivided Hindu Mitakshara family, an Aliyasanthana family or branch, a Marumakkattayam tarwad or a tavazhi possessing separate properties, or a Nambudri or other family to which the rule of impartibility applies, a firm or a company, an association of individuals, whether incorporated or not, and any institution capable of holding property'. The U.P. Agrl. I.T. Act also defines 'person' in similar terms under S. 2(11) of that Act. In that case, the Board of Agrl. I.T. held that because a common manager had been appointed and common account of income and expenditure had been maintained and only net income was being divided, the lands were held by an association of individuals, and the income thereof was liable to be assessed as income of an association of individuals. On a reference the High Court of Allahabad considered the question under three aspects, viz., whether there was an association of individuals, whether the association of individuals held property and whether the land was held in the capacities mentioned in the definition under S. 2(11). The High Court held there was an association of individuals and there was holding by an association of individuals, but on a finding in the negative on the third aspect concluded that two individuals could not be assessed as an association of individuals. The matter was taken to the Supreme Court by the revenue. The Supreme Court proceeded on the basis that there was an association of individuals and went on to consider whether they could be said to be holding land as an association of individuals. It observed that 'tax may be levied against a group of persons under section 3 of the Act as an association of individuals only if the income accrues to an association of individuals owning or holding property'. Further on, the Supreme Court stated as follows (p. 175) :
'In reaching the conclusion that the two lessees were holding land as an association of individuals, the High Court observed :
'The established facts here are that the two individuals jointly allowed the common manager to cultivate their lands and derive profits from them. They pooled their lands and got them cultivated as if they belonged to only one of them. The manager made no distinction between one piece of land and another piece of land; he manager them jointly. Only at the time of distribution of the profits he took into consideration the fact that one owned 316.3 acres and the other 326.1 acres. By pooling their lands together they eliminated the distinction between one holding 316.2 acres and the other holding 326.1 acres; each allowed the other to hold the land belonging to him.' In our view, these observations of the High Court are not supported by the findings recorded by the Board of Agricultural Income-tax. The only facts found by the Board are that the lessees had appointed a common manager, that common accounts were maintained, and that the net profits, after deducting from the receipts, expenditure for management of the lands under the two leases, were divided. In our view, the conclusion recorded by the High Court that the lessees as an association of individuals were holding land cannot be justified.'
7. The facts in the instant case are very much stronger that those dealt with by the Supreme Court. In the matter of owning the property, in the matter of enjoyment and realisation of profits and activities for carrying on the agricultural operations, they conducted themselves as individuals and not as an association of persons. No income was received by an association of individuals and no association of individuals was owning or holding the property. Therefore, the orders of the Commissioner are untenable and accordingly they are set aside. The assessments as have been made by the assessing authority are restored. The petitioners shall be entitled to their costs in these revision petitions.
8. Advocate's fee Rs. 100 in each of these cases.