TaxTMI 
TaxTMI 
2010 (1) TMI 226
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.... "the Act"). In these tax case revisions, the petitioners have raised the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Commissioner of Agricultural Income-tax has discharged his initial burden of establishing the existence of essential ingredients to constitute 'association of persons', among the petitioner and two others, before initiating suo motu proceedings under section 34 of the Tamil Nadu Agricultural Income-tax Act, 1955? 2. Whether on the facts and in the circumstances of the case, the Commissioner was justified in initiating proceedings under section 34 by his mere ipse dixit that the petitioner and two others are holding property with a common object to derive income....
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....ntly, the partner, namely, M. V. M. Venkatachalam and his three brothers sold their one-third undivided share to one Smt V. Ulagammai (petitioner in T. C. Nos. 332 to 334 of 1997) by four sale deeds and they retired from the partnership firm. A fresh deed of partnership was entered into by the said Ulagammai with the other two partners in the year 1975 and the land in estate was cultivated and income was derived by the respective partners. However, a deed of dissolution of partnership was made on January 23, 1978, followed by a registered deed of partition dated May 8, 1978. By that partition, the lands were divided by metes and bounds between the three individuals. 3. The Agricultural Income-tax Officer, who is having jurisdiction over th....
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....report, the Commissioner revised the assessment orders for three years from 1993-94 to 1995-96, as he could revise such an order only for a period of three years preceding to such revision in terms of section 34(2) (c) of the Act. The said order of the Commissioner is put in issue in these tax case revisions. 5. Heard Mr. R. Krishnamurthy, learned senior counsel for the petitioners and Mr. Haja Naziruddin, learned Special Government Pleader for the respondent. 6. There is no dispute rather it is an admitted fact that the individual status of all the three assessees in respect of their holdings was accepted by the Agricultural Income-tax Officer right from the assessment years 1979-80 onwards, till such time the impugned order of the Commi....
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....on (5) of section 65, wherein the Agricultural Income-tax Officer should satisfy himself as to the particulars specified in the application and only after such satisfaction; he could grant permission. Apparently, such satisfaction was arrived at by the Agricultural Income-tax Officer even in the year 1992 when he granted permission for the assessment year 1993-94. He had also taken into consideration the earlier assessment orders from 1978-79 onwards, wherein all the three individuals were assessed separately and such assessment orders were accepted. The order of the Agricultural Income-tax Officer is on the basis that the erstwhile partnership firm was dissolved, the properties were partitioned among the three individuals, that they mainta....
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...., all the three individuals are closely related and they can own their respective lands even without there being a legal sub-division, but on a demarcation made by them by mutual understanding. In matters like this, what is relevant is whether they actually divided the properties and they maintained separate accounts for managing the property and the income derived from the property is being put in separate accounts and not in common account. From the facts, it is clear that the partition deed is not in dispute and the properties though managed by a manager in common, the profits are not shared by the individuals, but the respective profits are credited to their respective accounts. For the entitlement of the provision of section 65, the me....
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....lp of two residents in the village for looking after their lands and cultivating them, would not ipso facto constitute them as an association of individuals within the special meaning given to that term for the purpose of assessment under the Agricultural Income-tax Act." 14. The Commissioner has exercised the power under section 34 to revise the earlier orders of assessment only on the ground that the properties are managed through a common manager and all the three individuals shared the profits of income. As far as the first reason is concerned, we do not find any justification for the said reason as the person, who has some estates, could ask a common manager to supervise the land belonging to others as well, for the purpose of conveni....