Trustees receiving agricultural income for named beneficiaries are taxed under the specific trustee rule, not as one unit.

Agricultural income received by trustees on behalf of identified beneficiaries is governed by the specific trustee provision in section 8(1)(a) of the Kerala Agricultural Income-tax Act, 1950, not the general rule in section 8(2)(a). Where the trust deed allocates defined shares to named beneficiaries, the trustee receives the income in a representative capacity and the beneficiaries' equitable interests remain relevant for assessment. The income cannot therefore be treated as a single taxable unit in the hands of the trustee, and assessment must reflect the beneficiaries' respective shares.

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Issues: (i) Whether the trustee's liability to agricultural income-tax is governed by section 8(1)(a) or section 8(2)(a) of the Kerala Agricultural Income-tax Act, 1950; (ii) whether the trustee's agricultural income could be assessed as a single unit.

Issue (i): Whether the trustee's liability to agricultural income-tax is governed by section 8(1)(a) or section 8(2)(a) of the Kerala Agricultural Income-tax Act, 1950.

Analysis: Section 8(1)(a) specifically deals with a trustee who is entitled to receive agricultural income on behalf of another person, and provides that tax shall be levied and recovered from the trustee in the same manner and to the same amount as it would be from the person on whose behalf the income is receivable. The trust deed showed that the trustees held the property for the named beneficiaries with defined shares, making the trustee's position one of receipt for beneficiaries rather than a case falling under the general rule in section 8(2)(a). The vesting of property in the trustees did not displace the beneficiaries' equitable interest or the representative character of the receipt.

Conclusion: Section 8(1)(a) applied, not section 8(2)(a), and the finding was in favour of the assessee.

Issue (ii): Whether the trustee's agricultural income could be assessed as a single unit.

Analysis: Because the income was received by the trustee on behalf of multiple beneficiaries with specified shares, the statutory scheme required the assessment to reflect that representative capacity. The trustee could not be treated as a single taxable unit ignoring the beneficiaries for whose benefit the income was receivable. The authorities below erred in treating the whole agricultural income as assessable in one unit in the hands of the trustee.

Conclusion: The trustee could not be assessed as a single unit, and the finding was in favour of the assessee.

Final Conclusion: The assessment had to proceed under the representative provision applicable to trustees, with the beneficiaries' shares kept in view, and the Revenue's approach of treating the trustee as a single unit was unsustainable.

Ratio Decidendi: Where a trust deed shows that agricultural income is receivable by trustees on behalf of identified beneficiaries, the specific trustee provision governs and the income cannot be assessed as a single unit ignoring the beneficiaries' beneficial interests.

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