C T SENTHILNATHAN CHETTIAR Vs. STATE OF MADRAS

JUDGEMENT

(1.) This appeal by special leave is directed against the judgment of the Madras High Court in a revision under section 54(1) of the Madras Agricultural Income Tax Act, 1955, hereinafter referred to as "the Act", whereby the High Court held that the settlement, which we will presently refer to, was hit by section 9(1) of the Act, and the income from the lands settled were liable to be included in the assessable agricultural income of the assessee. The relevant facts are these : The appellant, C.T. Senthilnathan Chettiar, hereinafter referred to as the assessee, executed a deed of settlement on November 19, 1959, in favour of Vatsala, who was his concubine. After reciting that the settlor had great love and affection for her, etc., the deed provides :

(2.) The Agricultural Income-tax Officer included the income from the lands settled under this deed in the hands of the assessee. The assessee filed a revision before the Commissioner of Agricultural Income-tax who held that the document evidenced a revocable transfer and the settled lands were an asset remaining the property of the settlor within the meaning of section 9(1) of the Act. He refused to exclude the income from the lands settled in the deed from the assessable income of the assessee.

(3.) The assessee then filed a revision under section 54(1) of the Act to the High Court. The High Court agreeing with the Commissioner held that the settlement was hit by section 9(1) of the Act. The assessee having obtained leave from this court, the appeal is now before us.