PAMBRA COFFEE PLANTATIONS Vs. STATE OF KERALA

JUDGEMENT

(1.) THIS reference, at the instance of the assessee under Section 60 of the Agrl. Income-tax Act, 1950, arises out of an order passed by the Kerala Agrl. Income-tax Appellate Tribunal, Addl. Bench, Ernakulam, in A. I. T. A. No. 39 of 1989. The relevant assessment year is 1979-80 and the relevant accounting year is July 1, 1977, to June 30, 1978. The following are the questions of law arising for consideration of this court ;

(2.) IN our judgment in I. T. R. Nos. 19 to 28 of 1993, Issac Peter v. Commr. Agrl I. T. [1998] 229 ITR 752, we have considered in detail, the scope of Section 28(1) and it has been held that even though the assessment has to be made on the reconstituted firm by applying the provisions contained under Clause (a) of Sub-section (5) of Section 18, the total income of each partner of the firm including therein his share of its income, profits and gains of the previous year has to be assessed and the sum payable by him on the basis of such assessment shall be determined. Therefore, no partner can be made liable to pay tax in respect of income, profits and gains which he has not received for the previous year. Following the above decision, we hold that even though a single assessment has to be made against the reconstituted firm for the year 1979-80, as regards income received for the period between July 1, 1977, and March 28, 1978, the liability for tax has to be apportioned between the partners of the firm before its reconstitution and for the period between March 28, 1978, and June 30, 1978, it has to be apportioned between the partners under the reconstituted firm.