K. Raveendran, Former Managing Director, M/S. Padivayal Plantations, Vaduvanchal, Wayanad District V. Agricultural Income Tax and Sales Tax Officer, Vytheri, Kalpetta

WP(C)/18372/2004

AI Insights

The case involves K. Raveendran, a former managing director of M/S. Padivayal Plantations, who contested the assessment of additional pool payments received from the Coffee Board after the dissolution of the firm. The firm was dissolved on April 1, 1992, and from the assessment year 1993-94 onwards, individual partners were assessed for their respective incomes. The petitioner argued that post-dissolution, the firm should not be assessed for income received. However, the government contended that under Section 4(2) of the Agricultural Income Tax Act, 1991, any amount received in the previous year from the Coffee Board for coffee delivered in any year for sale in pool auction is deemed income in the year of receipt. The court upheld the government's position, stating that the firm was still considered to be in existence for the purpose of receiving agricultural income from these payments.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 793812 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 31-07-2008
• Assessment Year: misc
• Laws Referred To: Agricultural Income Tax Act, 1991
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: G P TEKCHAND
• Assessee Lawyers: P
• Keywords: Agricultural income-tax; Assessment; Sales Tax; Coffee Board; Pool Payments; Firm Dissolution
• Section: 13; 4(2)

Judgement Text

" 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: APPENDIX(WPC 18372/2004) PETITIONER'S EXHIBITS: P1: TRUE COPY OF REVISED ASSESSMENT ORDER DT.26.11.1999 ISSUED BY RESPONDENT. 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 \"Padivayal Plantations\", Vaduvanchal. The firm was dissolved with effect from 1.4.1992. Until the assessment year 1992-93, the firm was assessed for agricultural income tax and from 1993-94 onwards individual partners were assessed for the income derived from the land held by respective partners. At the time of dissolution, the firm had pooled coffee for sale by Coffee Board in auction and pool receipts were received after dissolution of the firm. The case of the petitioner is that after dissolution of the firm, assessment in the name of the firm is not permissible. Counsel for the petitioner contended that by virtue of the non-obstante clause contained in Section 13, payments later received in the name of the firm cannot be assessed in the hands of the partnership or in the hands of the individual assessees. 2. Government Pleader on the other hand contended that by virtue of Section 4(2) of the Agricultural Income Tax Act, 1991, any amount received in the previous year from the Indian Coffee Board in respect of coffee 2 delivered in any year for sale in pool auction excluding any amount on which tax was levied in any previous year shall be deemed to be income in the year of receipt. There is no dispute that the firm even after dissolution with effect from 1.4.1992 received additional pool payments from Coffee Board and shared the same among partners. If that be so, then the firm was in existence after dissolution for the purpose of receipt of agricultural income in the form of pool payments from Coffee Board. Since additional payment received is assessable under Section 4(2)(i) of the A.I.T. Act, the additional income received from Coffee Board was rightly assessed in the hands of the firm. The assessments have been rightly confirmed in the first appeal and by the Tribunal. The challenge against assessment so confirmed is, therefore, rejected. Therefore, there is no scope for assessment of additional income received on coffee pooled by the firm in the hands of individual assessees who were assessed under the system of compounding under Section 13 of the Act. If any such assessment is made, the Assessing Officer is directed to recall the same and make assessment only in the name of the firm which has pooled the coffee. The W.Ps. are disposed of with direction to the Assessing Officer to make change, if any required, based on the above observation. C.N.RAMACHANDRAN NAIR Judge pms "