B M SHIVAKUMAR Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) This is the third round of litigation which has been brought to this court in order to undo the legislative efforts of roping in "the coffee pool payments" received after partition of an erstwhile Hindu undivided family ("HUF", for short) as agricultural income in the hands of the Hindu undivided family itself for the purpose of levying tax under the provisions of the Agricultural Income-tax Act, 1957 (hereinafter referred to as "the principal Act").

(2.) The petitioner and his two sons, Sri B.S. Arvind and B.S. Ashwin, constituted a Hindu undivided family. This family being a coffee planter had agricultural income. It was accordingly being assessed to tax under the provision of the Act. A partition was effected in the family by metes and bounds under a registered deed dated March 29, 1980, and it was so claimed before the respondent-Assistant Commissioner of Agricultural Income-tax, Hassan. The said respondent after holding an enquiry as required under section 30(1) of the Act accepted the partition by his order dated August 20, 1983 (annexure "A"). Accordingly, the three coparceners were subjected to separate assessments in respect of agricultural income derived by them out of the portion of the family property falling to their share for the assessment years 1981-82, 1982-83 and 1983-84 on the basis of returns submitted by each of them showing their status as "individual". According to the petitioners in the said returns, they also included their respective shares in the coffee back-pool payments which had been received subsequent to the date of partition relating to the coffee sold by the erstwhile Hindu undivided family to the Coffee Board during the periods anterior to the date of partition. The assessment orders for the years 1981-82 and 1982-83 were passed on June 22, 1983, and that for the year 1983-84 was passed on March 22, 1984. During the previous years pertaining to the said assessment years, the coparceners had respectively received Rs. 1,76,765.19, Rs. 33,922.43 and Rs. 21,207.80 as "back-pool payments" from the Coffee Board as consideration of coffee crops sold by the Hindu undivided family to the Board during the periods prior to its partition.

(3.) The Joint Commissioner of Agricultural Income-tax, keeping in view the Explanation inserted in sub-section (2) of section 30 of the Act by the Karnataka Act (23 of 1985), pursuant to his suo motu revisional powers under section 35 of the Act, partially set aside the assessment orders referred to above made in the hands of the respective coparceners as tenants-in-common/association of persons. According to him, as the back-pool payments received during the said periods being related to the coffee crop harvested by the erstwhile Hindu undivided family, the same could not have been assessed in the hands of the individual coparceners. He also directed that the said payments should be assessed in the hands of the erstwhile Hindu undivided family; and the demand notice be issued accordingly. The said order of the Joint Commissioner was challenged before this court in C.R.P. No. 4756 of 1991. This court keeping in view the law laid down in W.P. Nos. 16845 to 16847 of 1987 disposed of on August 20, 1991 (V.R. Uddappa Gowda v. Agrl. ITO), set aside the assessment orders dated September 17, 1991, passed consequent upon the direction of the Joint Commissioner and remitted back the matters to the Joint Commissioner for fresh disposal in accordance with law.