1965 (7) TMI 7 - HC - Income Tax

Jenmikaram payable by a kudiyan according to the provisions of Act XII of 1108 is not agricultural income - Jenmikaram realized in respect of agricultural properties in the erstwhile Travancore area is not an agricultural income - If the immediate and effective source is not land the income cannot be considered to be agricultural income

Summary

Issues:
1. Whether a Namboodiri family could be assessed as a unit of taxation for the purposes of super-tax under section 56 of the Agricultural Income-tax Act?
2. Whether the expression 'Hindu undivided family' in section 56 of the Agricultural Income-tax Act includes a Namboodiri family post the amendment to section 2(kk) and (2m) by the Amendment Act XII of 1964?
3. Whether jenmikaram realized in respect of agricultural properties in the erstwhile Travancore area qualifies as agricultural income?

Analysis:
1. The court addressed the issue of whether a Namboodiri family could be assessed as a unit of taxation for super-tax under section 56 of the Agricultural Income-tax Act. The court answered this question in the affirmative, stating that a Namboodiri family can indeed be assessed as a unit of taxation for super-tax under the Act.
2. The court then considered whether the expression 'Hindu undivided family' in section 56 of the Agricultural Income-tax Act includes a Namboodiri family following the amendment to section 2(kk) and (2m) by the Amendment Act XII of 1964. The court concluded that post the amendment, a Namboodiri family falls within the scope of the term 'Hindu undivided family' under the Act. Therefore, the court answered this question in the affirmative as well.
3. The final issue addressed was whether jenmikaram received from agricultural properties in the erstwhile Travancore area constitutes agricultural income. The court examined the nature of jenmikaram post the Jenmi and Kudiyan Act and referred to relevant legal precedents. The court held that jenmikaram payable by a kudiyan as per the provisions of Act XII of 1108 is not agricultural income. The court's decision was influenced by the principle that the immediate and effective source of income must be land for it to qualify as agricultural income. Consequently, the court answered this question in the negative, in favor of the assessee and against the department.
4. The judgment concluded by stating the decision on the income-tax referred case and specified that there would be no direction regarding costs.