TMI Blog1963 (4) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... la having Rs. 0-12-0 share. The concern, it was stated, carried on agricultural operations in six farms consisting of a little over Ac. 2,000-00 of land out of which about Ac. 1,600-00 were purchased jointly by Padampat Singhania and Bishundayal Jhunjhunwala and Ac. 483-00 were purchased in the name of a mill, namely, Motilal Padampat Sugar Mill of which the aforesaid two persons were the owners. Later on, by a resolution of the mill company, the farms were separated from the mill and the lands in their entirely were cultivated by the concern. As nothing now depends upon the distinction between the lands purchased in the name of the mill and those acquired otherwise, we shall ignore the distinction for the purpose of these cases. The assessee claimed that the concern was a co-ownership concern belonging to the two persons above-named in the shares already indicated, and as they were residents of Uttar Pradesh at a very long distance from the farms in Champaran, they appointed one S. K. Kanodia as common manager for facility of cultivation and management. This common manager looked after and managed the agricultural operations during the years in question. The further case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the question whether the assessee was a co-ownership concern or a partnership firm was a question of fact, and even otherwise, there were facts and circumstances from which it was open to the taxing authorities to come to the conclusion that the firm was a partnership firm. On this footing the High Court answered the question against the assessee. The assessee then moved this court for special leave and having obtained such leave has brought the present appeals to this court from the decision of the High Court dated September 29, 1959. We may now refer to some of the provisions of the Act which bear upon the question before us. Section 2 of the Act is the definition section. According to the definition given in that section "agricultural income " means, inter alia, any income derived from land which was used for agricultural purposes. It was not disputed before us that the income which the assessee in these cases derived was from land which was used for agricultural purposes, namely, the cultivation of sugarcane, etc. The definition section further stated that the word " firm " had the same meaning as in the Indian Partnership Act, 1932, and the word " person " meant any ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quite clear from the section that where a common manager appointed under any law or under any agreement holds land from which agricultural income is derived, on behalf of persons jointly interested in the land or in the agricultural income derived therefrom, the aggregate of the sums payable as agricultural income-tax by each person on the agricultural income derived from such land and received by him shall be assessed on the common manager in respect of the agricultural income-tax so payable by each such person and the common manager shall be liable to pay the same. We have already stated that the learned Solicitor-General has not now argued before us that section 13 will apply in the case of a partnership firm. He has, however, very strongly argued that section 13 in terms will apply if the assessee in the present cases is a co-ownership concern (as distinguished from a partnership firm) and the common manager thereof must be assessed in respect of the aggregate of the sums payable as agricultural income-tax by each such co-owner. Mr. S. P. Varma appearing for the respondentState of Bihar-has indeed conceded that if the assessee in the present cases is a co-ownership concern, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility of management. Now, the appointment letter showed that the two co-owners joined together in appointing Kanodia as common manager for supervision of cultivation and for management of the agricultural properties in the district of Champaran. " Partnership ", within the meaning of the Indian Partnership Act of 1932, is a relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The appointment of Kanodia by the two co-owners acting together is consistent with either view and does not clinch the issue in favour of a partnership. The High Court appears to have taken the appointment of Kanodia by the two co-owners as a circumstance establishing a partnership. The High Court has further pointed out that the two co-owners lived in Uttar Pradesh and belonged to two different families. We do not see how that circumstance gives any indication in law of a partnership. As to the division of the profits and losses, the finding of the Deputy Commissioner of Agricultural Income-tax was that the two proprietors had no definite shares in the agricultural lands, by which he must have meant that the lands of the six farms had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee for the three years in question as also the frame of the question which the assessee itself wished to be referred to the High Court. As to the frame of the question we have stated earlier that the Board of Revenue really made a mistake and it may even be that on behalf of the assessee the question was not properly framed. The assessee's contention all along was that it was a co-ownership concern and not a partnership, but in framing the question the word "partners" was used. We do not think that a mistake in the framing of the question, which was later corrected by the High Court, will change the real position in law. As to the returns which were filed they were not printed in the paper-book. Learned counsel for the respondent gave us copies of the returns. These returns showed that in all the three years the assessee indicated its status as a co-ownership concern and the name of the assessee was shown as the manager, Champaran Cane Concern or common manager, Champaran Cane Concern. The body of the return contained four alternatives as to whether the return was being submitted by an individual, firm, a joint family or an association of individuals. The intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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