Composite rent from mixed land use is taxable to the extent it relates to non-agricultural land.

Composite rent received from mukarrari tenants is taxable to the extent it is attributable to non-agricultural land; that portion is not exempt as agricultural income merely because the payer also derives agricultural income. The authorities accepted that a definite part of the rent related to non-agricultural property, and that factual attribution was not effectively challenged. On that basis, the sum of Rs. 2,000 was treated as assessable to income tax, and double taxation was not involved because only the non-agricultural component was taxed. The document also notes that further factual findings were required for one reference item.

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Issues: Whether the sum of Rs. 2,000 received from mukarrari tenants was assessable to income tax or constituted agricultural income.

Analysis: The rent received from mukarrari tenants covered both agricultural and non-agricultural lands. The authorities found that a definite part of the composite rent represented consideration for non-agricultural land, and that finding had not been effectively challenged. The amount received in respect of non-agricultural land was not exempt merely because the payer was a tenant deriving some agricultural income as well. Double taxation was not attracted, since the assessee was taxed only on the portion attributable to non-agricultural property.

Conclusion: The sum of Rs. 2,000 was assessable to income tax and was not agricultural income.

Final Conclusion: The reference was not finally answered on the first sum and was sent back for further factual findings, while the second sum was held taxable.

Ratio Decidendi: A composite rent is taxable to the extent it is attributable to non-agricultural land, and such attribution depends on the surrounding facts and the character of the source of income.

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