N S BALASUBRAMANIAM Vs. STATE OF MADRAS

JUDGEMENT

(1.) AS all the three tax cases are connected and arise out of a common order of the Agricultural Income-tax Tribunal, they are dealt with together. AS the facts and the points involved in all the cases are the same it is sufficient to refer to the facts in the first case, T.C. No. 183 of 1966. The petitioner in this case returned a net income of Rs. 6, 474.34 under the Madras Agricultural Income-tax Act, for the assessment year 1962-63 in respect of lands leased out to a sugar factory. In response to a notice under section 17(2) of the Act it was however urged on behalf of the assessee that even the said sum did not represent the income of that year. The assessing authority, however, rejected the assessee's contention and computed the total income of the assessee at Rs. 37, 814 calculating the rents at the rate of Rs. 175 per acre for 216.08 acres held by the assessee during the accounting year, and leased out to the sugar factory.

(2.) THE assessment order was challenged before the Assistant Commissioner of Agricultural Income-tax and later before the Agricultural Income-tax Appellate Tribunal but without success Before the Tribunal the principal contention urged by the assessee was that the Agricultural Income-tax Officer assessed him to tax taking the rent due for the lease year 1961-62, i.e., the year ending 30th June, 1962, as having accrued within the accounting year ending March 31, 1962, though according to the terms of the lease deed the rent is payable only at the end of the lease year, that is on June 30, 1962, that the assessment made on the basis that the entire amount of Rs. 37, 814 had accrued before March 31, 1962, was illegal and that, therefore, the assessment had to be set aside. THE Tribunal took the view that as per the terms of the lease deed the rent is payable on or before June 30, 1962, that this clause would not necessarily mean that the rent is payable only on 30th June, 1962, that the words "on or before 30th day of June of each year" would mean any one of the several days falling within the whole year ending with 30th June of that year, and that the assessing officer was, therefore, justified in proceeding on the basis that the rent had accrued on a day prior to first April of each lease year. THE Tribunal also gave an alternative reason for rejecting the assessee's contention. It held that even assuming that the rent accrued only on the specified date, i.e., 30th June, of each year, the assessee cannot succeed in cancellation of the assessment as there would be at least one accrual on 30th June falling within each financial year ending 31st March, and that every financial year ending with 31st March includes within it one date of 30th June when admittedly there would be an accrual of rent. It also rejected the assessee's contention that though there was an accrual of rent on June 30, 1961, which fell within the accounting year 1961-62 relevant for the assessment year 1962-63, it had already been brought to tax in the previous year and that, therefore, there could not have been any assessment for the year in question, on the ground that there is no evidence to establish that contentionBefore us the learned counsel reiterates practically the same contentions, For appreciating those contentions it is necessary to scan through the lease agreement dated November 13, 1954, entered into between the assessee and the sugar factory.