TaxTMI 
TaxTMI 
1960 (11) TMI 1
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....e for his wife, and that each of them should be assessed separately on the income that had been derived from the lands allotted to his or her share. On August 8, 1956, the Agricultural Income-tax Officer passed an order under section 29(1) of the Act, an order which apparently the assessees sought. The Agricultural Income-tax Officer recorded that he was satisfied that the joint family properties had been partitioned among the assessees in definite shares, that is, between Raju and his five sons. This was followed up by individual orders of assessment with reference to each of the members of the family. Those orders themselves were under section 65(1) of the Act In the proceedings before the Agricultural Income-tax Officer, the claim that ....
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....sessment proceedings before the Agricultural Income-tax Officer, it should be clear that section 29(1) could have no application at all. Section 29(1) could be invoked by persons of a family who had been assessed as a Hindu undivided family to agricultural income-tax. The proceedings related to the first of the assessment years 1955-56. There has been no assessment to income-tax prior to 1955-56. We shall illustrate our point by an example. If there had been a division in status, whether or not there had been an actual division of the properties between the divided coparceners, long antecedent to the previous year corresponding to the assessment year 1955-56, the income would have lawfully vested in each of the divided coparceners when the ....
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....ithin the scope of section 9 of the Act. If the claim of the petitioner was that there had been a real partition in 1951, followed even then by an actual division on ground of the tea and coffee plantations, which partition was evidenced subsequently by the deed dated March 9, 1955, it would be a case of disposition of property by a settlement within the scope of section 9 of the Act. It is not the nomenclature given to the document that really concludes the real nature of the transaction. In the document, dated March 9, 1955, there was no express reference to any division in status or to any partition between the members of the family having been already effected. Still, it was open to the petitioner to prove that, despite the apparent ten....
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....artition of joint family properties. In either case, if there had been such a partition before the commencement of the previous year in relation to the assessment year 1955-56, the income from the properties so partitioned and allotted to the several members of the family could not be clubbed together for purposes of taxation and treated as income of the joint family. The question will have to be investigated afresh and in accordance with all the materials placed before the Commissioner. We have referred to the finding of the Commissioner that the partition of 1951 was a sham transaction. How the transaction could have been brought about in 1951 with a view to evade a tax not imposed then, it is a little difficult to understand. Apart from....
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.... upon and recognised by the commercial tax department. What conclusion the Commissioner should come to on the factum of partition of 1951 will be for him to decide in the first instance. Only it will have to be based on the entire material placed before him. He certainly did not consider the entire material when he records his conclusion that it was a sham transaction brought about to evade liability to pay agricultural income-tax. The order of the Commissioner dated July 22, 1957, is set aside and the proceedings are remanded to the Commissioner for disposal afresh. All the questions at issue will have to be gone into. If necessary, the Commissioner will give an opportunity both to the assessee and to the department to place further mater....