Agricultural income includes land revenue liability under Kerala land tax law even without separate assessment or collection.

Income derived from land used for agricultural purposes was treated as agricultural income where the land was subject to the Kerala Land Tax Act, 1961, even if tax had not yet been separately assessed or collected for that parcel. The court read "assessed" in section 2(a) of the Agricultural Income-tax Act, 1950 as meaning subjected to tax liability, not requiring prior individual quantification or actual collection. It held that the statutory basic tax on all lands in the State satisfied the land revenue requirement, and rejected a contrary interpretation that would create an artificial distinction between surveyed and unsurveyed lands.

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Issues: Whether income derived from unsurveyed lands, in respect of which land tax under the Kerala Land Tax Act, 1961 had not been separately assessed or collected, constituted agricultural income under section 2(a) of the Agricultural Income-tax Act, 1950.

Analysis: The definition of agricultural income required income from land used for agricultural purposes and either assessed to land revenue in the State or subject to a local rate assessed and collected by officers of the State. The Kerala Land Tax Act, 1961 imposed basic tax on all lands in the State, and the court treated the statutory liability itself as an assessment to land revenue. The word "assessed" was read in the sense of "to tax", not as requiring prior actual quantification or collection in each individual case. A contrary view would create an artificial distinction between lands merely because tax assessment had or had not been completed.

Conclusion: Income from lands subject to land revenue under the Kerala Land Tax Act, 1961 is agricultural income within section 2(a) of the Agricultural Income-tax Act, 1950, even if the tax payable on those lands has not yet been actually assessed or collected.

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