(1) All agricultural income arising to any person by virtue of settlement or disposition, whether revocable or not, and whether effected before or after the commencement of this Act, from assets remaining out of the property of the settler or disponer shall be deemed to be the agricultural income of the settlor or disponer, and all agricultural income arising to any person by virtue of a revocable transfer of assets shall be deemed to be the agricultural income of the transferor:
Provided that, for the purposes of this sub-section, a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the re-transfer directly or indirectly of the agricultural income or assets to the settlor, disponer or transferor or in any way gives the settlor, disponer or transferor a right to re-assume power directly or indirectly over the agricultural income or assets:
Provided further that the expression "settlement or disposition" shall, for the purposes of this sub-section, include any disposition, trust, covenant, agreement or arrangement and the expression "settlor or disponer" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made:
Provided also that this sub-section shall not apply to any agricultural income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the life time of the person and from which agricultural income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said agricultural income as and when the power to revoke arises to him.
1[(2) In computing the total agricultural income of any individual, there shall be included all such agricultural income as arises directly or indirectly,--
(a) to the spouse of such individual,--
(i) from the membership of the spouse in a firm in which such individual is a partner;
(ii) from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart;
(b) to a minor child (not being a married daughter) of such individual,--
(i) from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner;
(ii) from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration; and
(c) to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefits of his or her spouse or minor child (not being a married daughter) or both.
2[Explanation (1).]--For the purpose of clause (a), the individual, in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater, and for the purpose of clause (b), the income of the minor child of the partnership shall be included in the income of that parent whose total income (excluding the income referred to in that clause) is greater, and where any such income is once included in the total income of either spouse or parent, any such income arising in any succeeding year shall not be included in the total income of the other spouse or parent, unless the3[Assistant Commissioner of Agricultural Income-tax] or the3[Agricultural Income-tax Officer], as the case may be, is satisfied, after giving that spouse or parent an opportunity of being heard, that it is necessary so to do.]
4[Explanation (2).--For the purposes of clause (a), where the spouse of an individual is a beneficiary under a trust, the income arising to the trustee from the membership of the trustee in a firm in which such individual is a partner shall, to the extent such income is for the immediate or deferred benefit of the spouse of such individual, be deemed to be income arising indirectly to the spouse of such individual from the membership of the spouse in a firm in which such individual is a partner.
Explanation (3).--For the purposes of clause (b), where the minor child of an individual is a beneficiary under a trust, the income arising to the trustee from the membership of the trustee in a firm in which such individual is a partner shall, to the extent such income is for the immediate or deferred benefit of the minor child, be deemed to be income arising indirectly to the minor child from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner.
Explanation (4).--Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual, directly or indirectly to the family otherwise than for adequate consideration (the property so converted or transferred being hereunder referred to as the converted property) then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act,--
(a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly;
(b) the income derived from the converted property or any part thereof shall be deemed to arise to the individual and not to the family;
(c) where the converted property has been the subject matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse or minor child on partition shall be deemed to arise to the spouse or minor child from assets transferred indirectly by the individual to the spouse or minor child and the provisions of sub-section (1) shall, so far as may be, apply accordingly:
Provided that the income referred to in clause (b) or clause (c) shall, on being included in the total income of the individual, be excluded from the total income of the family, or, as the case may be, the spouse or minor child of the individual.]
________________________
1. Substituted by Act 14 of 1983 w.e.f. 1.12.1982.
2. Re-numbered by Act 38 of 1986 w.e.f. 9.11.1992.
3. Substiuted by Act 5 of 1993 w.e.f. 9.11.1992.
4. Inserted by Act 38 of 1986 w.e.f. 17.10. 1986.