BABU C G Vs. STATE OF KERALA

JUDGEMENT

(1.) THE following two questions are referred to this court by the Kerala Agricultural Income-tax Appellate Tribunal, Additional Bench (Palghat), for our consideration and consequent answers in regard thereto :

(2.) WHETHER, on the facts and in the circumstances of the cases, the Tribunal is justified in holding that there is no Sub-partnership in these cases ?"

(3.) PERUSAL of the income-tax orders (illustratively exhibits A to A-5) specifically show this position that these assessees have shown income from other heads also. However, for the assessment years in question, the shares of income have been taken into consideration by the Income-tax Officer not on the basis of the arrangement, but treating the two partnership firms in relation to the shares of the assessees separately and independently. The assessees approached the Appellate Assistant Commissioner of Agricultural Income-tax and Sales Tax, Palghat, by appeals. The appellate authority carefully verified the connected records with regard to the share income due from the Union Timber Traders and found that for the previous years the Tax Officer, Alathur, acted on the basis of the arrangement pleaded. It is also observed that in the share income from the U. T. T. Company, as far as the present assessees are concerned, it was assessed to be in the hands of Muthuvelan and Sons--the second partnership. On the basis of these factual observations, on verification of the connected records the appellate authority accepted the contention put forth as stated above about the addition of income of the Union Timber Traders with another firm, Muthuvelan and Sons. As a consequence, the Assessing Officer was directed to re-examine the case and re-fix the income according to the above observations and directions. This was by separate orders (exhibits B-1 and B-2).