Compounding entitlement based on maximum land held during the year; exceeding exempt extent denies composition for that assessment year.

Entitlement to compounding for agricultural income is determined by the maximum extent of land held at any time during the financial year; the assessment and composition operate on a year as the unit basis, not on portions of the year. The statutory reference to land held does not impose a continuous holding requirement throughout the year. Composition once determined applies for that year and continues for subsequent years until the assessee elects to opt out, with any changes required to be reported. Because the maximum land held exceeded the exempted extent, compounding was not available for the assessment year in question.

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Issues: Whether the petitioner is entitled to the benefit of compounding for the assessment year 1984-85 where the maximum land held during that year exceeded the exempted extent (100.75 acres).

Analysis: Section 10(1) of the Tamil Nadu Agricultural Income-tax Act treats entitlement to compounding based on the maximum extent of land held during any part of the financial year; the relevant unit for assessment and composition is the year and not portions of the year. Section 65 refers to land held by the assessee and does not require continuous holding throughout the year. Composition is determined for the year and for subsequent years until the assessee opts out, with any later changes to be reported.

Conclusion: The petitioner is not entitled to the benefit of compounding for the assessment year 1984-85; decision adverse to the petitioner and in favour of the Revenue.

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