HARI HARI Vs. COMMISSIONER OF AGRICULTURAL INCOME TAX

JUDGEMENT

(1.) THIS is a reference under section 26 of the Hyderabad Agricultural Income-tax Act. The two questions that are referred to for our decision are as follows :

(2.) THE relevant facts are as hereunder :

(3.) SRI Sankar Row, the learned Government Pleader, sought to contend further that the partition that was entered into between the father and the minor sons was only a colourable partition. There is no evidence to that effect. The income-tax authorities have not found as a fact that the partition is not a genuine one. It was contended that the partition was entered into with a view to avoid payment of agricultural income-tax. As pointed out by Beaumont C.J. in Central Talkies Circuit, Matunga, In re.,"... any one is entitled so to conduct his affairs within the law as to avoid incidence of taxation, and if a man finds that he will suffer less in taxation by carrying on business in partnership with his mother rather than his wife, he is entitled to select his mother. But the partnership must be a genuine partnership." It is clear law that a partition may be validly entered into between the parties even though it might result in the avoidance of the incidence of taxation.