Clubbing of transferred land and revisional power in composition agricultural income-tax proceedings were upheld.

In composition proceedings for agricultural income-tax, land settled by an assessee on his wife could be clubbed with the assessee's holding because the proviso to section 65(7) applies section 9(2) as far as may be, carrying forward the principle that transferred assets to a /wife may still be treated as part of the assessee's holding for determining the composition amount. The Commissioner's suo motu revisional power was also not excluded, since section 34 is couched in wide terms and section 65(7) only carves out returns, accounts, documents, assessment, and matters incidental thereto. The challenge therefore failed.

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Issues: Whether, in proceedings for composition of agricultural income-tax, the land settled by the assessee on his wife could be treated as part of the assessee's holding, and whether the Commissioner could exercise suo motu revisional power under the Act in relation to the composition order.

Analysis: The proviso to section 65(7) makes the provisions of section 9(2) applicable, as far as may be, to composition proceedings, showing that the legislative principle underlying clubbing of assets transferred to the wife is to be applied even where tax is paid on a composition basis. Composition is only a substituted mode of fixing tax liability, and the holding of the assessee is therefore deemed to stand augmented by the land transferred to the wife for the purpose of determining the composition amount. The revisional power under section 34 is expressed in wide terms and extends to orders passed by subordinate authorities under the Act, and section 65(7) does not exclude its applicability. The statutory exclusion in section 65(7) is confined to returns, accounts, documents, assessment, and matters incidental thereto.

Conclusion: The clubbing of the wife's land in the assessee's holding for composition purposes was valid, and the Commissioner's revisional jurisdiction was not excluded. The challenge failed.

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