COMMR OF AGRL INCOMETAX Vs. BHRAMAGIRI B ESTATE

JUDGEMENT

(1.) Annexure 'A' is the copy of the deed of partnership executed on 8-10-1959, which constituted the firm. Clause.5 of the deed (Annexure 'A') provided that the partnership was to continue in the first instance for a period of five years from the date of the deed. Annexure 'B' is the fresh deed of partnership executed on 22-12-1965. The undisputed fact is that the assessee, M/s. Brahmagiri 'B' Estate was recognised to be a registered firm during the assessment years prior to 1965-66. The firm sought renewal of registration under S.27 of the Kerala Agricultural Income Tax Act, 1950 (the Act) for the assessment years 1965-66 and 1966-67 by the application dated 11-6-1965. Annexure 'B' provided inter alia:

(2.) The question is whether the assessee firm is entitled to the registration for the assessment years 1965-66 and 1966-67. S.27 provides:

(3.) The only point of doubt raised by the Government Pleader appearing for the Revenue is that in view of the fact that the instrument of partnership was dated 22-12-1965, whereas the application for renewal of registration was much earlier, on 11-6-1965, and the benefit was to enure for the whole year (the accounting year commencing with effect from 1-4-1965 and ending with 31-3-1966) whether the assessee was entitled to claim the benefit of registration for the purpose of agricultural income tax for the years 1965-66 and 1966-67. As far as the first of the two years is concerned, in view of the fact that partnership deed existed in 1965-66, there could be no doubt that the assessee was entitled to the benefit of registration. As far as the second of the two years, viz., 1966-67, is concerned, the contention has to be examined with reference to the instrument which came into existence during the course of the years, provided the business had been carried on throughout the year. In this case, Annexure B fresh deed of partnership recites that the partnership was carried on throughout and the deed relates to that period as well as for a further period of five years. The requirement in the words of Raghavan, J., that the document should be in force on the day the application was made remains satisfied if the deed recited the existence of the partnership from the beginning of the year and stated that the deed related to the partnership business. The argument of the Government Pleader appearing for the Revenue that because a five-year period is stated in Annexure B, that has to be reckoned from 22-12-1965 and when it is done so the previous year has to be excluded from the time the deed was in force cannot hold good from the very recital of the document. The decision of the Madras High Court, relied on by the Tribunal, in M.R. Raju Chettiar v. Commissioner of Income Tax ( 1963 (48) ITR 737 ) states: