1984 (5) TMI 84

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.... mainly relied on the order of the ITO and submitted that reliance of the learned counsel for the assessee on the case of CIT v. Kameshwar Singh 1 SC Tax Cases 706, is misplaced because in the said case mutation in the name of the mortgagee-transferee was there but it is not so in the instant case. He relied on the cases of CIT v. Kunwar Trivikram Narain Singh [1965] 57 ITR 29 (SC) and Premier Construction Co. Ltd. v. CIT [1948] 16 ITR 380 (PC). He also relied on Kanga and Palkhivala's The Law and Practice of Income-tax, Vol. 1, Seventh edn., page 349. The learned counsel for the assessee, Mr. Prem Nath Jain, on the other hand, beside relying on the order of the AAC and the case of Kameshwar Singh, mainly relied on the case of Mustafa Ali K....

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....om cultivation of agricultural land which was in possession of the assessee and which was got cultivated by the assessee as a mortgagee-lessor. The finding of the AAC is covered on all fours by the Privy Council decision in the case of Mustafa Ali Khan. In the said case, certain agricultural lands were mortgaged as per usufructuary mortgage deed by Nanpara Estate as mortgagor in favour of the Court of Wards, acting on behalf of the assessee, the Raja of Utraula, as mortgagee. Simultaneously the Court of Wards, acting on behalf of the assessee, leased back to the Raja of Nanpara by a lease of the same date the whole of the mortgaged property at an annual rent equivalent to the annual instalment payable under the mortgage, on the basis of abo....

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....tum of pension being calculated was based on the revenue collections of the jagir. It was this income which was held to be non-agricultural. In that case, their Lordships of the Supreme Court held that as per arrangement available in the said-case, the assessee had no interest in the land or in the land revenue payable in respect thereof and the source of income was the arrangement and income in that case was not derived from land, and, therefore, not agricultural income. It is not so in the instant case. Income in the instant case, is derived from agricultural land which came in possession of the assessee as usufructuary mortgage. Similarly, reliance of the learned departmental representative on the case of Premier Construction Co. Ltd. al....