PYDAH SURYANARAYANA MURTY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 66(1) of the Indian IT Act made to this Court by the Tribunal, Hyderabad Bench. The question of law formulated by the Tribunal for consideration is as follows:

(2.) AT the outset we may refer to the comment made by the learned counsel for the Revenue as to the language employed in the question formulated. It is stated by him that the real question in this case is whether the income in question is entitled to exemption from income tax under S. 4(3)(viii) of the Act, and the question should have been framed accordingly. It is also suggested that the employment of the expression "not" before the words "agricultural income" in the question formulated is inappropriate, as it would seem to cast the burden on the Revenue to prove that the disputed amount is not agricultural income, while in law the onus of proving the right to exemption from tax is upon the assessee. There is some force in the two submissions made by the learned counsel. But the objections are really as to the form of the question and not to the substance. We are satisfied that the question formulated by the Tribunal substantially reflects the controversy between the assessee and the Revenue.

(3.) IN respect of the asst. year 1955 56 the assessee submitted a return declaring a net taxable income in a sum of Rs. 3,473. In the assessment order made by the ITO, Kakinada, the declaration of the net income by the assessee was not accepted. The ITO held that the sum of Rs. 11,621 5 7 received by the assessee from the Government in respect of the occupation of his lands by the military authorities should be included in his total assessable income. On that footing he determined the total taxable income of the assessee at Rs. 17,237 and deducting the tax paid under S. 18(a) of the Act directed the assessee to pay the balance of tax amounting to Rs. 2,200 1 0 on or before 20th Jan., 1956.