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Commissioner of Agricultural Income-tax Vs. Narayanan Tratan Namboodiripad. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberIncome-tax Reference No. 57 of 1964
Reported in[1967]64ITR57(Ker)
AppellantCommissioner of Agricultural Income-tax
RespondentNarayanan Tratan Namboodiripad.
Cases ReferredMaharajkumar Gopal Saran Narain Singh v. Commissioner of Income
Excerpt:
- .....tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. and rent is not land within the meaning of the definition.'the principle accepted by the supreme court is that the immediate and effective source of the income must be found out. if the immediate and effective source is not land, the income cannot be considered to be agricultural income.we accept the principles laid down in these decision and hold that jenmikaram payable by a kudiyan according to the provisions of act xii of 1108 is not agricultural income. accordingly, we answer the third question referred to us in the negative, that is, in favour of the assessee and against the department.this income-tax referred case is.....
Judgment:

GOVINDAN NAIR J. - We feel no doubt that the second question referred to us by the Tribunal reading as under :

'(ii) Whether the expression Hindu undivided family in section 56 of the Agricultural Income-tax Act (Act XXII of 1950) will not take in a Namboodiri family, in view of the amendment to section 2 (kk) and (2m) by the Amendment Act XII of 1964 ?'

Should be answered in the affirmative, for it is clear that, after the amendment was affected, a Namboodiri family is included in the expression 'Hindu undivided family' in section 56. Therefore, we answer question No. (ii) in the affirmative. It necessarily follows that question No. (i) reading as under :

(i) Whether a Namboodiri family could be assessed as a unit of taxation for the purpose of super-tax under section 56 of the Agricultural Income-tax Act (Act XXII of 1950) ?' should also be answered in the affirmative. We do so. The third question referred to us reads as follows :

'(iii) Whether Jenmikaram realised in respect of agricultural properties in the erstwhile Tranvancore area is agricultural income ?'

After the passing of the Jenmi and Kudiyan Act, the Jenmi ceased to be the owner of the land. His only right is to get the Jenmikaram. This he cannot collect directly from the Kudiyan. The Kudiyan is to pay this to the government and there is a charge on the property for the Jenmikaram. The Jenmikaram had to be paid by the Kudiyan irrespective of whether the land was cultivated or not and irrespective of whether any income was derived from the land. The Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax had to consider a similar question, whether malikhana is agricultural income or not. They came to the conclusion that it was not. One of the reasons stated was that it was payable whether the land was used for agricultural purposes or not and whether it yielded any profit or not. In another decision of the same Tribunal in Maharajkumar Gopal Saran Narain Singh v. Commissioner of Income-tax, it was observed as follows :

'It is not rent or revenue derived from land; it is money payable under a contract imposing a personal liability on the covenantor the discharge of which is secured by a charge on land. The covenantor is at liberty to make the payments out of any of her moneys, and is bound to make them whether the land is sufficiently productive or not.'

The kudiyan too is at liberty to make the payments out of any of his moneys, and is bound to make them whether the land is sufficiently productive or not. The Supreme Court in Commissioner of Income-tax v. Kunwar Trivikram Narain Singh has extracted a passage from the Privy Council decision in Commissioner of Income-tax v. Raja Bahadur Kamakshya Narayan Singh, which reads as follows :

'The word derived is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of the definition.'

The principle accepted by the Supreme Court is that the immediate and effective source of the income must be found out. If the immediate and effective source is not land, the income cannot be considered to be agricultural income.

We accept the principles laid down in these decision and hold that jenmikaram payable by a kudiyan according to the provisions of Act XII of 1108 is not agricultural income. Accordingly, we answer the third question referred to us in the negative, that is, in favour of the assessee and against the department.

This income-tax referred case is ordered on the above terms. There will be no direction regarding costs.


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