1970 (12) TMI 25 - HC - Income Tax

Agricultural income - partition between father and minor sons - evidence of separate cultivation of the lands - mere fact of joint living or joint cultivation would not display the fact of partition - income of the two minor sons is not to be included in the income of the assessee

Issues Involved:
1. Applicability of Section 11(1) of the Orissa Agricultural Income-tax Act, 1947.
2. Validity of the Tribunal's judgment regarding the 1954 partition.
3. Inclusion of the assessee's mother's income in the assessee's income.

Issue-wise Detailed Analysis:

1. Applicability of Section 11(1) of the Orissa Agricultural Income-tax Act, 1947:

The primary issue was whether the income of the petitioner's minor sons from lands allotted to them in a 1954 partition should be included in the petitioner's income under Section 11(1) of the Act for the assessment years 1955-56, 1956-57, and 1958-59 to 1962-63. The Tribunal had previously included this income, reasoning that the petitioner and his minor sons were living in a joint mess. However, the High Court clarified that the minors were owners of their respective lands post-partition, and the petitioner merely managed these lands on their behalf. The court emphasized that the term "beneficiary" in Section 11(1) refers to someone who has beneficial interest without legal ownership. Since the minor sons had both title and possession of their lands, they were not beneficiaries under Section 11(1). Therefore, the income derived from these lands should not be included in the petitioner's income.

2. Validity of the Tribunal's Judgment Regarding the 1954 Partition:

The Tribunal failed to independently assess whether the 1954 partition was genuine. The High Court noted that the Tribunal did not find the partition deed to be a sham and acknowledged the separate assessment of income and rent payments for the petitioner and his minor sons. The court highlighted that joint living and messing do not necessarily negate a partition, especially when there is a registered partition deed. The High Court concluded that the Tribunal committed a legal error by not recognizing the partition and held that there was indeed a partition by metes and bounds in 1954.

3. Inclusion of the Assessee's Mother's Income in the Assessee's Income:

The Tribunal had included the income of the assessee's mother in the assessee's income, which the High Court found to be a factual issue rather than a legal one. The court noted that this issue was raised for the first time before the Tribunal and was rightly rejected. Consequently, the High Court determined that this question should not have been referred to it, as it involved a pure question of fact.

Conclusion:

1. Section 11(1) of the Act is not applicable, and the income of the two minor sons should not be included in the assessee's income for the relevant assessment years.
2. The Tribunal's judgment is vitiated in law for not independently considering the materials on record regarding the 1954 partition. The partition by metes and bounds among the petitioner and his minor sons is confirmed.
3. The reference regarding the inclusion of the mother's income is without jurisdiction, as it involves a factual issue. Consequently, the income of the mother is to be included in the petitioner's income for the relevant assessment years.

The references are accepted in part, with each party bearing their own costs.

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