P3: True Copy Of Form v. P5: True Copy Of Order Dt.30.4.04

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 31ST JULY 2008 / 9TH SRAVANA 1930 WP(C).No. 18372 of 2004(K) -------------------------- PETITIONER: ------------ K.RAVEENDRAN, FORMER MANAGING DIRECTOR, M/S.PADIVAYAL PLANTATIONS, VADUVANCHAL, WAYANAD DISTRICT. BY ADV. SRI.P.RAVINDRAN (SR.) RESPONDENTS: ------------- AGRICULTURAL INCOME TAX AND SALES TAX OFFICER, VYTHERI, KALPETTA. BY G.P. SRI.TEKCHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31/07/2008, ALONG WITH OP NO. 28142 OF 2001, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: P1: TRUE COPY OF REVISED ASSESSMENT ORDER DT.26.11.1999 ISSUED BYRESPONDENT. P2: TRUE COPY OF ORDER DT.8.2.2001 OF RESPONDENT. P3: TRUE COPY OF FORM V. P4: TRUE COPY OF ASSESSMENT ORDER DT.4.3.99 ISSUED BY RESPONDENT. P5: TRUE COPY OF ORDER DT.30.4.04. P6: TRUE COPY OF DEMAND NOTICE DT.7.5.2004. P6(a): TRUE COPY OF DEMAND NOTICE DT.7.5.2004. P6(b): TRUE COPY OF DEMAND NOTICE DT.7.5.2004. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J.....................................................................W.P.(C) No.18372 of 2004 &O.P. No.28142 of 2001....................................................................Dated this the 31st day of July, 2008. JUDGMENT The petitioner is a partner of a coffee estate by name "PadivayalPlantations", Vaduvanchal. The firm was dissolved with effect from1.4.1992. Until the assessment year 1992-93, the firm was assessed foragricultural income tax and from 1993-94 onwards individual partners wereassessed for the income derived from the land held by respective partners.At the time of dissolution, the firm had pooled coffee for sale by CoffeeBoard in auction and pool receipts were received after dissolution of thefirm. The case of the petitioner is that after dissolution of the firm,assessment in the name of the firm is not permissible. Counsel for thepetitioner contended that by virtue of the non-obstante clause contained inSection 13, payments later received in the name of the firm cannot beassessed in the hands of the partnership or in the hands of the individualassessees. 2. Government Pleader on the other hand contended that by virtue ofSection 4(2) of the Agricultural Income Tax Act, 1991, any amount receivedin the previous year from the Indian Coffee Board in respect of coffee delivered in any year for sale in pool auction excluding any amount onwhich tax was levied in any previous year shall be deemed to be income inthe year of receipt. There is no dispute that the firm even after dissolutionwith effect from 1.4.1992 received additional pool payments from CoffeeBoard and shared the same among partners. If that be so, then the firmwas in existence after dissolution for the purpose of receipt of agriculturalincome in the form of pool payments from Coffee Board. Since additionalpayment received is assessable under Section 4(2)(i) of the A.I.T. Act, theadditional income received from Coffee Board was rightly assessed in thehands of the firm. The assessments have been rightly confirmed in the firstappeal and by the Tribunal. The challenge against assessment so confirmedis, therefore, rejected. Therefore, there is no scope for assessment ofadditional income received on coffee pooled by the firm in the hands ofindividual assessees who were assessed under the system of compoundingunder Section 13 of the Act. If any such assessment is made, the AssessingOfficer is directed to recall the same and make assessment only in the nameof the firm which has pooled the coffee. The W.Ps. are disposed of withdirection to the Assessing Officer to make change, if any required, based onthe above observation.