Agricultural income-tax exemption for trust confirmed where non-agricultural income stayed below the Central tax threshold.

A trust was held not liable to agricultural income-tax under the Tamil Nadu Agricultural Income-tax Act where its non-agricultural income was below the taxable limit under the Central Act. Liability under the State Act was treated as dependent on whether the trust's non-agricultural income was exigible to tax under the Central Act for the relevant year. The assessment records showed that the trust was not assessable under the Central Act and that its non-agricultural income for both years remained below the taxable limit, so the State agricultural income could not be brought to tax. The absence of separate State rules also supported the exemption.

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Issues: Whether the appellant trust was liable to agricultural income-tax under Section 17(3) read with Section 4(b) of the Tamil Nadu Agricultural Income-tax Act when its non-agricultural income was below the taxable limit under the Central Act.

Analysis: Liability under the State Act was treated as dependent on whether the trust's non-agricultural income was exigible to tax under the Central Act for the relevant year. The assessment records showed that the trust was not assessable under the Central Act and that its non-agricultural income for both years was below the taxable limit. In that situation, the State agricultural income could not be brought to tax, and the absence of separate rules under the State Act reinforced that the assessee could not be denied exemption on that basis.

Conclusion: The appellant was not liable to agricultural income-tax, and the assessment could not be sustained.

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