Commissioner of Income Tax vs Shiv Singh

S.S. Sodhi, J.—Kirpa Singh, a non-resident Indian, purchased three acres of agricultural land in village Rahimpura. According to his father, Shiv Singh, the annual income from this land was about Rs. 3,000 and this entire amount was spent by him on his household expenses. In other words, no part of it was paid to or received by Kirpa Singh: Does this and the further fact that there was also an investment by Kirpa Singh in a Fixed Deposit Receipt of Rs. 40,000 in their joint names, that is, of Kirpa Singh and Shiv Singh, render Shiv Singh an "agent" of son Kirpa Singh, in terms of Section 163(1)(c) of the Income Tax Act, 1961 ? Herein lies the controversy raised.

The following question arose for decision :

"Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the case of the assessee is not covered by Clause (c) of Section 163(1) of the I. T. Act, 1961 ? "

Section 163(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), reads as under :

"163. (1) For the purposes of this Act, ''agent'', in relation to a nonresident, includes any person in India--...

(c) from or through whom the non-resident is in receipt of any income, whether directly or indirectly ; or"

It will be seen that the income from the land in question is undoubtedly that of Kirpa Singh. If instead of taking it, he chooses to let his father utilise it, it cannot but be treated as an indirect receipt of the said income by Kirpa Singh. Seen in this light, the assessee, Shiv Singh, must indeed be held to be covered by Clause (c) of Sub-section (1) of Section 163 of the Act. .

This reference is consequently answered in favour of the Revenue and against the assessee. There will, however, be no order as to costs.