SARJU BAI MST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) -

(2.) WE have before us three references by the Income-tax Appellate Tribunal under Section 66 of the Indian Income-tax Act. The three references raise between them two questions and we need not for this purpose distinguish between the three references. It is sufficient to say that the references relate to a lady called Mst. Sarju Bai, who apparently lived at Jhansi and there owned a very considerable area of land situated in the civil station. It is out of her transactions in respect of this property that these questions have arisen in relation to the assessment year 1939-40 and 1940-41. I propose to deal with the two questions quite separately.

(3.) IT is noticeable that, although there are cases in the High Court at Calcutta in which the same view has been taken, there are others in which a completely opposite view has prevailed. In the case of In re Manager, Radhika Mohan Roy Wards Estate, Sir Harold Derbyshire and Mr. Justice Mukherjee have held in 1940 that interest on arrears of rent realized under Section 67 of the Bengal Tenancy Act of 1885 is not agricultural income within the meaning of Section 2 (1) (a) of the Indian Income-tax Act. And they have gone somewhat out of their way to way that it is neither rent nor revenue. They have traced the origin of the Interest exclusively to that "statutory recompense which is allowed to the landlord for being deprived of the use of the money which is payable as rent by the tenant." With great respect, it is my view that, while no doubt, it does serve the purpose of being that statutory recompense which they say it is, it may none the less be derived from the land in the sense that I have endeavoured to explain above. I do not feel that its purpose as statutory recompense is inconsistent with its being derived from the land for the reason that the occasion for the recompense itself arises out of the land.