TaxTMI 
TaxTMI 
1953 (1) TMI 27
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.... the amount collected as selamis or premia for waste lands and abandoned holdings, namely, ₹ 9,331-9-4 had not been shown as this was not subject to assessment of agricultural income-tax. The Agricultural Income-tax Officer, however, made an order of assessment including a sum of ₹ 9,332 less collection charges at the rate of 15 per cent. amounting to ₹ 1,398--Rs. 7,934 as agricultural income. The order of assessment was made on the 10th of November, 1941. Against this order the assessee took an appeal to the Appellate Assistant Commissioner for Agricultural Income-tax, Assam. The appeal was dismissed on the 13th May, 1942. Against this order the assessee made an application for review under Section 27 of the Assam Agricultural Income-tax Act before the Commissioner. The assessee also filed a reference petition before the Board of Agricultural Income-tax, Assam. The review petition was dismissed by the Commissioner and on the application for reference the Board made an order referring two questions of law to this Court for its opinion. The questions are:- 1. Whether selami received for settlement of agricultural holdings where the rate of annual rent reserved f....
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....unt of selami-Rs. 9,332. There is a note appended, settlement of virgin and estate purchased lands; 2. Maximum extent-59 Bighas 2 cottahs and 10 Dhurs. Selami-Rs. 161-8-6?. Minimum extent-15 cottas. Selami-Rs. 2-11-9, 3. Rate of selami-varies with the quality of lands. There are generally two fixed rates of selami, namely, ₹ 7 per bigha for jungle lands and ₹ 10 per bigha for lands which are not jungle; 4. No tenant was ejected under Section 69 of the Goalpara Tenancy Act; action was taken under Section 68. 5. Lands were sold in execution of rent decrees and purchased by the landlord and then settled on receipt of selami; 6. Selami was not present. There is a compulsory payment at the inception of the letting. The question is whether on the facts found by the Board, the selami that was received in the present case by the assessee could be regarded as agricultural income or not. The term "agricultural income" is defined in Section 2(a) of the Assam Agricultural Income-tax Act. The relevant portion runs as follows:- "Unless there is anything repugnant in the subject or context .................agricultural income means-(1) Any rent or revenue d....
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....missioner of Income-tax, Bengal v. Shaw Wallace & Co. [1932] 59 I.A. 206, Sir George Lowndes attempted a definition of the term "income". The relevant observations are as follows:- "Income, their Lordships think, in this Act" (Indian Income-tax Act) "connotes a periodical monetary return (coming in) with some sort of regularity or expected regularity from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall." The opinion expressed by the Board in the case above cited was quoted with approval in a later decision of the Board in the case of Gopal Saran Narain Singh v. Commissioner of Income-tax, Bihar & Orissa [1935] 3 I.T.R. 237 ; 62 I.A. 207. Lord Russell of Killowen stating the opinion of the Board however made an important reservation. The reservation being that the word "income" is not limited by the words "profits" and "gains"; anything which can properly be described as income is taxable under the Act unless expressly excluded. The Judicial Commit....
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....ular receipt like selami can be regarded as income or as capital receipt cannot be answered in the abstract. Each case has to be decided on its special facts. It was for this reason that the Federal Court directed a remand to this Court for the purpose of enabling this Court to find out the precise nature of the selami in the present case, after obtaining from the Board the answers to the five factors which were mentioned in the judgment. The facts which have now been found by the Board may be summarised as follows:- The assessee is a cosharer in the Parbatjoar Estate having 8 annas 9 pies share therein. The Tenancy Act in the area is the Goalpara Tenancy Act I of 1929. Under that Act the ejectment sections are spread over Sections 65 to 69. Section 65 makes a general provision that a tenant can only be ejected in execution of a decree. Section 66 speaks of ejectment of permanent tenants on the ground of a breach of a covenant. Section 67 speaks of ejectment of occupancy raiyats. This is permissible only in two cases, namely, cases of improper use or cases of breach of a condition consistent with the Act. Section 68 lays down that a permanent tenure holder or a raiyat at fixed ra....
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....eceipts of selami in case of settlement of virgin lands or estate purchased lands occasioned by default of the tenant in paying arrears of rent. In these circumstances, in my opinion, a fair conclusion to draw is that the selami is received by the landlord for permission to the lessee to enter the land for enjoying the benefits of the settlement. In this view, the receipts that have been sought to be assessed in the present case must be regarded as capital receipts and not income within the meaning of the Assam Agricultural Income-tax Act. The view taken above receives support from two decisions of the Patna High Court, namely, the cases of Commissioner of Income-tax v. Visheswar Singh [1939] 7 I.T.R. 536 ; 18 Pat. 805 and Province of Bihar v. Maharaja Pratap Udai Nath Sahi Deo [1941] 9 I.T.R. 313 ; 20 Pat. 699. It is true that in these cases the selami that was received concerned one item of property, but this fact is not material for the present discussion. In my opinion, the true character of the receipt in the present case does not materially differ from the receipts in those cases. It remains for me to consider a decision of this Court in the case of Birendra Kishore Manikya....