K A CHIDAMBARA RAO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE petitions are filed under Section 55 of the Karnataka Agricultural Income-tax Act, 1957 (for short "the Act"), against the order dated July 19, 1985, passed by the Joint Commissioner of Agricultural Income-tax, Bangalore (annexure E), purporting to revise the assessment orders passed by the Additional Agricultural Income-tax Officer, Hassan, annexures B and C, relating to the assessment years 1978-79 and 1979-80.

(2.) A Hindu undivided family of Sri K.A. Chidambara Rao, owned agricultural lands on which coffee was grown. For the years 1975-76 and 1976-77, the coffee grown on these lands was owned with the Coffee Board. Part payment towards the sale price was made to Chidambara Rao as the karta of the Hindu undivided family. Supplementary payments to the coffee pool for these years were to be made on the declaration of dividends by the Coffee Board. The Hindu undivided family consisted of K.A., Chidambara Rao and his wife. He had no children. He admitted his paternal relation to a partnership firm under a deed of agreement. The partnership concern was named as "Cheekanahally Estate". This partnership shall be referred to as "the firm" hereinafter.

(3.) NOTICE annexure D was issued by the Joint Commissioner of Agricultural Income-tax exercising its jurisdiction under Section 35 of the Act seeking to revise the assessment orders annexures B and C for the years 1978-79 and 1979-80. But instead of issuing the notice to the firm, the notice was issued to K.A. Chidambara Rao, being the karta of the Hindu undivided family. Chidambara Rao filed his objections. The objections filed were overruled and it was held that the income which related to the year 1975-76 and 1976-77 could be assessed in the hands of the Hindu undivided family of K.A. Chidambara Rao as the Hindu undivided family had contributed the coffee to the pool of the Coffee Board for these years and not in the hands of the firm. The orders annexures B and C were set aside. The Agricultural Income-tax Officer was directed to assess the erstwhile Hindu undivided family with regard to the coffee pool prior to April 1, 1977, but realised after April 1, 1977, as the taxable income of the erstwhile Hindu undivided family for the assessment years 1978-79 and 1979-80 and issue revised demand notice.