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P.S. Gopal Raja Vs. Agricultural Income-tax Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO.P. No. 4329 of 1980E
Judge
Reported in(1983)37CTR(Ker)261; [1985]155ITR434(Ker)
ActsKerala Agricultural Income Tax Act, 1950 - Sections 9(2)
AppellantP.S. Gopal Raja
RespondentAgricultural Income-tax Officer and ors.
Appellant Advocate Joseph Augustine, Adv.
Respondent AdvocateGovernment Pleader for respondent No. 1
Excerpt:
- - the learned advocate appearing for the first respondent wanted to support ex, p-1, on the ground that this is a case which clearly falls under section 9(2)(a)(iv) of the act and, therefore, it cannot be said that ex. ' 4. a careful reading of this section as a whole, and in particular, sub-section (2)(a)(iv), clearly shows that clause (iv) can apply only where there has been a transfer of assets of the assessee directly or indirectly to the minor child not being a married daughter, otherwise than for adequate consideration......in the name of his minor sons has not been proved. therefore, the assessing authority clubbed the income of properties purchased in the names of the minors with the income of the petitioner from his own properties and proposed to complete the assessment as if the petitioner owned 13.86 acres, ex. p-l notice was thereupon issued to the petitioner calling upon him to file his objection against the proposals of assessment on or before november 12, 1980. thus, ex. p-1 notice, as pointed out by the counsel for the petitioner, consists of two parts and the first part relates to the non-acceptance of returns filed by the petitioner in respect of properties admittedly owned and possessed by him, on the ground that there was no proper accounts or other evidence to substantiate the return filed.....
Judgment:

S.K. Kader, J.

1. The petitioner, who owns 9.02 acres of land said to have been mostly planted with cardamom at Udumbanchola village, seeks to quash the second part of Ex, P-1 notice issued to him under Section 18 of the Agrl. I.T. Act, 1950, hereinafter referred to as 'the Act', by the Agricultural Income-tax and Sales Tax Officer, the first respondent herein. The petitioner claims to have filed a return in accordance with the provisions of the Act in respect of income received by him from the properties owned by him for the years 1977-78, 1978-79, 1979-80 and 1980-81. The assessing authority did not accept the returns in the absence of accounts and other supporting evidence. Ex. P-1 notice states that the petitioner has purchased 2.50 acres and 2.34 acres of cardamom estate in the name of his minor sons, P.G. Subbaraju and P.J. Prabhu Ram, respectively, and that the source of income for purchasing these properties in the name of his minor sons has not been proved. Therefore, the assessing authority clubbed the income of properties purchased in the names of the minors with the income of the petitioner from his own properties and proposed to complete the assessment as if the petitioner owned 13.86 acres, Ex. P-l notice was thereupon issued to the petitioner calling upon him to file his objection against the proposals of assessment on or before November 12, 1980. Thus, Ex. P-1 notice, as pointed out by the counsel for the petitioner, consists of two parts and the first part relates to the non-acceptance of returns filed by the petitioner in respect of properties admittedly owned and possessed by him, on the ground that there was no proper accounts or other evidence to substantiate the return filed by the petitioner. The petitioner has no grievance against that part of the notice and the same has not been challenged in this petition. The second part of the notice relates to the income from 2.50 acres and 2.34 acres of cardamom estate purchased in the names of minor sons of the petitioner. The assessing authority, on the ground that the source of income for this purchase has not been proved, proceeded to assess the petitioner clubbing theincome from those properties with the income of the properties of the petitioner. It is this part of the notice that is being challenged and sought to be quashed.

2. The learned advocate appearing for the petitioner submitted that it is on the assumption that the case falls under Section 9(2)(a)(iv) of the Act, that the first respondent has proposed to assess the petitioner including the income from the property of the minors while computing the total agricultural income of the petitioner. The counsel submitted that this proposal is without any jurisdiction or authority as Section 9(2)(a)(iv) has absolutely no application to the case on the admitted facts. The learned advocate appearing for the first respondent wanted to support Ex, P-1, on the ground that this is a case which clearly falls under Section 9(2)(a)(iv) of the Act and, therefore, it cannot be said that Ex. P-1 notice issued is without jurisdiction or in violation of any statutory provisions.

3. The only question, therefore, that arises for determination in this original petition is whether, on the admitted facts and the available material, in computing the total agricultural income of the petitioner, can the income of the properties purchased in the name of his minor sons be included. Section 9(2)(a)(iv) reads :

'9. (2) In computing the total agricultural income of any individual for the purpose of assessment, there shall be included,

(a) so much of the agricultural income of a wife or minor child of such individual as arises directly or indirectly--. ......

(iv) from assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration.'

4. A careful reading of this section as a whole, and in particular, Sub-section (2)(a)(iv), clearly shows that Clause (iv) can apply only where there has been a transfer of assets of the assessee directly or indirectly to the minor child not being a married daughter, otherwise than for adequate consideration. The individual whose total agricultural income is sought to be computed for the purpose of assessment under Section 9(2) is the petitioner herein. Therefore, in computing the total agricultural income of the petitioner for the purpose of assessment, the assessing authority is entitled to include so much of the agricultural income of a minor child or children as arises directly or indirectly from assets transferred directly or indirectly to the minor children by him otherwise than for adequate consideration. Let us now see on the admitted facts before the assessing authority whether the total agricultural income of the petitioner is liable to be computed under Section 9(2)(a)(iv) of the Act, Admittedly, the petitioner has neither directlynor indirectly transferred any of his assets to the minor sons, viz., P.G. Subbaraju and P.J. Prabhu Ram. The documents under which 2.50 acres and 2.34 acres of cardamom estates had been purchased in the name of his minor sons, P. G. Subbaraju and P. J. Prabhu Ram, were made available before this court for perusal. The documents are written in Tamil and a correct and true translation of one of the documents in favour of P. G. Subbaraju has already been produced along with this original petition. The true and correct translation of the other document was also made available for perusal of this court. The recitals in both the documents are identical. There is nothing in the correct and true copy of the translation in favour of P.G. Subbaraju to show or indicate that the consideration for the assignment was given by the petitioner.

5. The respondents have no case that the properties which have been assigned in favour of the two minors belonged to the petitioner. There must be a transfer of properties to or in favour of the minors directly or indirectly by the petitioner otherwise than for adequate consideration. It is not disputed, as stated earlier, that the petitioner has not transferred any of his assets directly or indirectly in favour of the minors in any way and the properties which are said to have been purchased in the names of the minors are not properties which belonged to the petitioner or over which he has got any right whatsoever. Section 9(2)(a)(iv) can, therefore, have no application to the case on hand. The second part of Ex. P-l is, therefore, issued in violation of the statutory provisions in the Act and is thus liable to be quashed.

6. In the result, this original petition is allowed and the second part of Ex. P-1 notice consisting of the properties purchased in the names of the minors is hereby quashed. It is made clear that the first part of Ex. P-1 notice has not been challenged in these proceedings. This order will not in any way affect that part. No costs.


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