1996 (3) TMI 29 - HC - Income Tax

Summary

Issues:
Interpretation of section 9(2) of the Agricultural Income-tax Act regarding transfer of assets to wife and minor children without adequate consideration.

Detailed Analysis:
The judgment pertains to five references under the Agricultural Income-tax Act, focusing on whether the properties purchased by the wife and minor children of the applicant constitute a transfer of assets without adequate consideration, falling under section 9(2). The court clarified that previous questions were addressed in an earlier order and proceeded to analyze the specific issue at hand. The key question was whether the assessee could benefit from the provisions of section 9(2) of the Act.

The court referenced a previous case to emphasize the clear statutory provision of section 9(2)(iv) and highlighted that assets transferred to minor children without adequate consideration must be included in the assessment. The judgment relied on a prior decision to support the interpretation of the law in this context.

The Tribunal confirmed that the consideration for the properties purchased in the name of the wife and minor children came from the assessee himself. The counsel argued that repayments made by the family members on income from the properties should be considered as without consideration, but the court found no substantial evidence to support this claim.

Upon reviewing the appellate orders and assessment details, the court found no independent source of income for the wife and minor children in the property purchases. The court emphasized the lack of material supporting the contention that repayments were made to the assessee, leading to a conclusion that the transactions fell under the statutory provisions of section 9(2)(a)(iv) of the Act.

Ultimately, the court answered the question in favor of the Revenue and against the assessee, indicating that the transfer of assets to the wife and minor children without adequate consideration was not permissible under the Agricultural Income-tax Act. The judgment concluded by directing the forwarding of a copy to the Agricultural Income-tax Appellate Tribunal, Addl. Bench, Ernakulam, as required by law.