Agricultural income-tax liability continues where converted land is still cultivated and not shown to be revenue-free.

Land used for growing sugarcane remained within the agricultural income-tax net because conversion permission for non-agricultural use did not, by itself, alter the land's tax character. The Karnataka High Court applied the charging provision in the Karnataka Agricultural Income-tax Act and the constitutional and statutory concept of agricultural income, which require agricultural use and a relevant liability to land revenue or local rate. As the land continued to be used for cultivation and no material showed that it had become revenue-free in fact and in law, the exclusion argument failed and the revision petitions were liable to fail.

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Issues: Whether income derived from land that had been permitted to be converted for non-agricultural purposes remained liable to agricultural income-tax when the land was in fact used for growing sugarcane and was not shown to be revenue-free in fact and in law.

Analysis: Section 3 of the Karnataka Agricultural Income-tax Act, 1957 charges tax on agricultural income as defined in section 2(1)(a). The constitutional definition under Article 366(1) and the corresponding income-tax definition require both use of land for agricultural purposes and liability to land revenue or local rate. The land was admittedly used for agricultural cultivation, and no material was produced to show that the land had been exempted from land revenue after conversion. Mere permission for non-agricultural conversion did not by itself take the land outside the charging provision. In the absence of proof that the land was revenue-free in fact and in law, the statutory conditions for exclusion were not satisfied.

Conclusion: The income remained chargeable under the Act, and the revision petitions were liable to fail.

Final Conclusion: Conversion permission alone does not exclude agricultural use from the tax net where the land continues to attract land revenue liability and agricultural income is otherwise established.

Ratio Decidendi: Income derived from land used for agricultural purposes continues to be taxable as agricultural income unless it is shown that the land is revenue-free in fact and in law.

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