KUNHAMU HAJI L Vs. STATE OF KERALA

JUDGEMENT

(1.) In completing the reassessment for the years 1972-73 to 1975-76 and the assessment for the years 1976-77 and 1977-78, the Agricultural Income Tax Officer included in the computation of the total agricultural income of the assessee the income derived from an immovable property transferred by the assessee to his wife under a deed of trust dated 24-7-1969 (document No. 626/1969-Annexure C). The assessee's contention that, being a property held under trust, the income arising therefrom was not liable to be so added was rejected. His appeals to the Appellate Assistant Commissioner as well as to the Agricultural Income Tax Appellate Tribunal, Addl. Bench, Kozhikode were unsuccessful. The Tribunal held that the trust in question was hit by clauses (a) and (b) of sub-s.(3) of S.4 of the Agricultural Income Tax Act, 1950.

(2.) At the instance of the assessee, the Tribunal has now referred to us the following questions:

(3.) It appears to be the common case that there was a transfer of right, title and interest from the assessee to his wife in respect of the immovable property covered by the deed of trust (Annexure C). The stand of the revenue has been that, notwithstanding the transfer of the asset, the income from the property has to be included in the computation of the total income of the assessee by reason of S.9(2). The contention of the assessee that the income, being income from trust property, is not includible in the income of the assessee was rejected for the reason that clauses (a) and (b) of sub-s.(3) of S.4 do not recognise, for the purpose of exclusion under sub-s.(1) of that Section, the kind of trust said to have been created under the deed in question. We shall now examine the provisions of S.9 and 4 in so far as they are material.