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Judgment
V.V. Kamat, J.—In this revision, the following is the short question in regard to Which the petitioner-assessee expects an answer :
Whether on the facts and circumstances of the case is not the petitioner entitled to exclusion of Agricultural income in respect of the harvested cardamom before sale of the estate on 29th Nov., 1977, based upon Annexures X l and X2T
The facts are in a narrow compass. The petitioner is an assessee with the, IAC, Chittur and the assessment year in question Is 1979-80 relevant to the accounting year from 1st May, 1977 to 20th April, 1978. It is during this'' period that an agreement to sale was entered into on 8th Oct., 1977. There is a sale deed dt. 29th Nov., 1977. The contents of the sale deed refer to the earlier agreement to sale dt. 6th Nov., 1977. This agreement dt. 6th Nov., 1977, in turn shows reference again to earlier agreement dt. 8th Oct., 1977.
With regard to the year in question, the assessing authority refixed the income for assessment in the following manner :
(1)
Total agrl. income fixed in the office assessment proceedings No. E/1979-80 dt. 19th April, 1980
3,26,533.46
(2)
Cost of harvested cardamom of 4,575.5 Kgs. harvested before sale of estate on 29th Nov., 1977 valued at Rs. 140.39 Kg. as per market rate prevailed on 29th Nov., 1977
6,41,942.65
(3)
Cost of sale of matured cardamom of standing crops at the time of sale of estate on 29th Nov., 1977. Total 174.5 Kgs. 3,26,533.46 at the average market rate of Rs. 140.30 per Kg.
4,45,382.35
(4)
Cost of sale of full grown coffee of standing crops at the time of sale of estate on 29th Nov., 1977 harvested from 29th Nov., 1977. Total 2,06,116 points at the average market rate of Rs. 12 per point.
24,73,392.00
Total Income
38,87,250.45
Deduct the expenses
1,03,948.31
Net income fixed
37,83,300.00
In regard to the above aspects it is clear that the controversy of this petition centres around item No. 2 relating to harvested cardamom before the sale of the estate on 29th Nov., 1977 which is valued at Rs. 6,41,942.65 as would appear from the further travel of the proceedings.
The impugned order of the Tribunal would show that the Tribunal found in regard to the above item No. 2 that it is the Agricultural income of the petitioner. The Tribunal held that with regard to the standing crops, it would be the Agricultural income in the hands of the buyer. The Tribunal remitted the matter in respect of expenses incurred for harvest, for consideration afresh.
Therefore the petitioner-assessee has approached this Court by this petition for answer to the question. The Tribunal has considered the question only on consideration of the contents of the sale deed dt. 29th Nov., 1977, in para 8 of its order. The Tribunal takes up for consideration the question of assessment of harvested crop of cardamom prior to the sale deed dt. 29th Nov., 1977. It was contended before the Tribunal that the value of the harvested crop of cardamom is not the Agricultural income at the hands of the petitioner assessee.
On examining the issue, the Tribunal found that the petitioner conveyed the title and interest over the property only on the date of sale. The Tribunal observed that there are no covenants or recitals in the sale deed to hold that the estate vested in the purchaser on and from 6th Nov., 1977.''Accordingly, the Tribunal found the lower authorities right in assessing the value of the already harvested crops of cardamom (harvested till the date of the sale) as Agricultural income in the hands of the petitioner who was the owner of the estate till 29th Nov., 1977..
The learned counsel has taken us through the three documents viz., the, first agreement to sale dt. 8th Oct., 1977, followed by the second agreement to sale dt. 6th Nov., 1977; culminating into the sale deed dt. 29th Nov., 1977. With reference to these documents which are on record and accepted by the authorities, the question that is to be considered is as to whether the harvested cardamom stocked would be the property'' of the petitioner-asses see or it would be the property of the purchaser, especially in regard to the consequential question as to whose Agricultural income it would be. All the three documents are on record as Annexure Al, A3 and A2 respectively. The answer to the question would make it necessary to consider the contents of the two agreements to sale to ascertain as to whose Agricultural income it would be with reference to the cardamom collected and stocked in the estate. Even though these agreements are on record and they are inter-connected as found from the recitals of the three documents, the Tribunal has rest content to consider the recitals of the sale deed alone and that too with regard to the question of title of ownership and its transfer, to mention that the property in the estate stands transferred on the execution of the sale deed in question on 29th Nov., 1977, simultaneously. In our judgment this is not what is required to be enquired into to ascertain the position of tax liability of the petitioner assessee. What is required to be ascertained is the relationship of the parties the vendor and the purchaser with reference to the commodity stocked on the estate and in regard thereto cl. 5 of the agreement dt. 8th Oct., 1977, as well as cl. 10 of the agreement dt. 6th Nov., 1977, would have to be considered, which has not been done by the Tribunal. The Tribunal has misdirected itself that the income as regards the cardamom collected and stocked in the estate has any connection with the transfer of title of ownership. This is the error and in our judgment the answer to the question would be as indicated above. The Tribunal is required to consider the question in the light of the above observations.
For the above reasons the impugned order dt. 29th July, 1993, of the Kerala Agrl. IT Appellate Tribunal, Addl. Bench, Palakkad gets quashed and set aside and the proceedings stand remitted to consider the question in accordance with the above observations and according to law. The revision case disposed of as above.