1965 (10) TMI 19

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....elding and paying therefore unto the lessor the several rents and royalties mentioned in Part V of the Schedule at the respective times herein specified subject to the provisions contained in Part VI of the said Schedule." In Parts II, III and IV of the Schedule liberties, powers, privileges, restrictions and conditions enjoyed by the lessee were set out. By Part V the syndicate agreed to pay annually Rs. 2,629-8-8 as rent and royalty at the rate of 8 per cent. of the sale value of all manganese ore. By clause 1 of Part VII it was agreed that : " The lessee shall pay the rents and royalty reserved by this lease at the time and in the manner provided in Parts V and VI and shall also pay and discharge all taxes, rates, assessments and impositions whatsoever being in the nature of public demands which shall from time to time be charged, assessed or imposed upon or in respect of the mines or works of the lessee or any part thereof by authority of the Government of India or the Government of Bombay or otherwise except demands for land revenue..." The appellant received from the syndicate, beside rents and royalty, Rs. 16,309 in the year ending July 31, 1951, and Rs. 39,515 in the ....

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....the Bombay Local Boards Act, 1923, to pay the cess as a percentage of land revenue and not of the Jama. The High Court, in the light of the supplementary statement of the case, recorded its answer on the first question in the affirmative, subject to the reservation that " the amount of cess which the appellant was legally liable to pay under the Bombay Local Boards Act was not subject to income-tax " and answered the second question in the negative. With certificate granted by the High Court, these appeals have been preferred. The relevant statutory provisions bearing on the questions referred to by the Tribunal may be summarised. By the Bombay Taluqdari Tenure Abolition Act, 1949 (62 of 1949), all the incidents of the Taluqdari tenure attaching to the lands comprised in the appellant's estate were extinguished, and all Taluqdari lands were declared liable to payment of land revenue in accordance with the provisions of the Bombay Land Revenue Code, 1879, or Jama under an agreement or settlement recognised or declaration made under the Gujarat Talukdars' Act. Under the Bombay Land Revenue Code, by section 3(13) " superior holder " is defined as meaning a landholder, entitled to re....

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.... years in question considerably exceeded the local fund cess payable in respect of the lands. The syndicate believed that it was liable to pay to the appellant under clause 1 of Part VII of the indenture of lease cess computed at the rate of three annas on a rupee of the amount of rent and royalty. Transactions relating to property and contracts are of infinite variety and it is difficult to devise a precise definition of the expression " income " liable to tax under the Income-tax Act, without excluding some important categories thereof. The definition of " income " in section 2(6C) of the Income-tax Act, 1922, is an inclusive definition : it is devised for the purpose of the Act and includes diverse heads which in the normal connotation of the expression " income " would not be included. We have no desire in this case to enter upon the difficult task of devising an accurate definition of the expression " income." The observation of the Judicial Committee in Gopal Saran Narain Singh v. Commissioner of Income-tax that " Anything which can properly be described as income, is taxable under the Act unless expressly exempted ", gives an indication of the difficulties of the problem. ....

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....ion properly arises before them in the course of proceedings for assessment. The Income-tax Officer is, within the limits assigned to him under the Act, a tribunal of exclusive jurisdiction for the purpose of assessment of income-tax. He has under the Act to decide whether a particular receipt is income, and it is not predicated that he must make some person or body other than the assessee who may be concerned with that receipt as a party to the proceeding before he decides that question. As between the State and the assessee it is his function alone to determine whether the receipt is income and is taxable. The determination by the Income-tax Officer may be questioned in proceedings before superior tribunals which are permitted by the Act, but the Income-tax Officer cannot be prevented from determining a question which properly arises before him for the purpose of assessment of tax, merely because his determination may not bind some other body or person qua the assessee. It is maintained by counsel for the appellant that in the Manual of Revenue Accounts issued under the authority of the Government of Bombay it is recorded that the local fund in respect of land held under a mini....