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TMI Blog1998 (11) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Smt. Chandri N. Shah) and Rs. 96,815 and Rs. 1,46,186 from the firm (in the case of Smt. Amrit Arvind Shah) are not to be taken for rate purposes as per the provisions of section 10(2A) of the Income-tax Act, 1961. 3. In the case of Smt. Chandri N. Shah, the assessee filed the return for the assessment year 1993-94 on 23-9-1993 declaring total income at Rs. 1,27,770 and agricultural income at Rs. 2,16,838. For the assessment year 1994-95, the assessee filed the return of income on 31st August, 1994 declaring total income of Rs. 2,55,710 and agricultural income at Rs. 1,33,740. In the case of Smt. Amrit Arvind Shah the assessee filed the return for the assessment year 1994-95 on 24-8-1994 declaring total income at Rs. 3,21,720 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was further contended that as per the provisions of Rule 5 of Part IV of First Schedule, nothing contained in the rule shall apply for computing the agricultural income of the assessee in relation to the assessment year commencing on or after 1-4-1993. When the agricultural income of the firm was not to be considered as agricultural income of the partners, question of aggregating such agricultural income for rate purposes in the hands of its partners did not arise. Accepting the above, submissions, the learned CIT(A) decided the issue in favour of the assessee on the following lines :- "The submissions are acceptable. The assessee had no agricultural income of her own. The share in agricultural income from the firm was not to be aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IV of the First Schedule, the learned Departmental Representative submitted that in the instant case of the assessee Rule 2 is applicable which reads as under :- "Rule-2 - Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1A) of section 2 of the Income-tax Act (other than income derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver or rent-in-kind referred to in the said sub-clause (c) shall be computed as if it were income chargeable to income-tax under that Act under the head "Profits and gains of business or profession" and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A (other than sub-sections (3) and (4) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural income ; (b) The share in agricultural income from the firm, in which the assessee is a partner, should not be aggregated for the rate purpose in view of section 10(2A) w.e.f. 1-4-1993 ie. from the Assessment year 1993-94 and omission of section 67 and Rule 5 of Part IV of First Schedule of Finance Act, 1992 with effect from same date ie. 1-4-1993. Thus, the learned Authorised Representative for the assessee submitted that the orders of the CIT(A) may be upheld. 8. I have heard the rival submissions and gone through the orders of the revenue authorities. After giving careful consideration, I am of the view that the order of the CIT(A) is to be confirmed. Section 2(9)(d) of the Finance Act, 1992 provides that net agricultural i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e derived from any building required as a dwelling house by the receiver of the rent or revenue or the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it were income chargeable to income-tax under that Act under the head "Profits and gains of business or profession" and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A, (other than sub-sections (3) and (4) thereof) 41, 43, 43A, 43B and 43C of the Income-tax Act shall, so far as may be, apply accordingly. It is further to be noted that the assessee's income is not type of income that referred in section 2(1A). I am of the view that the learned CIT(A) has taken the correct view and applied Rule 5 as far as these assessees are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the shares so computed shall be regarded as the agricultural income or loss of the assessee. Proviso to this section further states that nothing contained in this rule shall apply for computing the agricultural income of the assessee in relation to the assessment year commencing on or after the 1st day of April, 1993. Therefore, it makes clear that in the case of the assessees, Rule 5 shall not be applicable. Section 10(2A) inserted with effect from 1-4-1993 reads as under :- "in the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm shall not form part of total income of the Partner". Explanation - For the purposes of this clause, the share of a partner in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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