KALI PD SINGH Vs. COMMR OF INCOME TAX

JUDGEMENT

(1.) In this Income-tax reference made by the Income-tax Appellate Tribunal the dispute relates to two items, viz., a sum of Rs. 4000 which was paid to the assessee by way of salami by one Dwarka Prasad Agarwala for obtaining a lease & also another sum of Rs. 351 paid by another person, viz., one Amin Ahmed Khan for obtaining settlement of fireclay land from the assessee.

(2.) The assesses is a zamindar & within the abmit of his zamindari there are tracts of various mineral & mica lands. During the year of accounting i.e. 1943-44, the applicant leased out an area of 3071 acres of land to one Dwarka Prasad Agarwala for the purpose of enabling him to extract mica therefrom. The lease was for a term of 9 years on an annual rental of Rs. 153. It was in connection with this lease that a salami of Rs. 4000 was paid by the said Dwarka Prasad Agarwala for obtaining the lease. The assessee contended that this 4000 rupees was a capital receipt in connection with the transfer of the prospective mineral rights in the land. The claim of the assessee was not entertained by the revenue authorities & the salami of Rs. 4000 was taxed as a revenue receipt & not as capital receipt. In regard to the other sum it has been found that this sum was received by the assessee as salami or premium for settlement of fireclay land measuring about 51.6 acres for a period of 9 years. The two leases, one in favour of Amin Ahmed Khan, are both annexures to the reference made by the Tribunal & the two points which have been formulated for decision by this Court are :

(3.) These two points, in my opinion, have to be answered in favour of the assessee in view of a number of judicial decisions upon the point which conclude the matter, the latest of those being the decision of this Court in Commissioner of Income-tax, B. & O. v. Kamakshya Narain Singh, A. I. R. (34) 1947 Pat. 252, corresponding to 14 I.T.R. 738 at page 746. In the case in question the point was whether a sum of Rs. 5,25,000 received as salami by the assesses was taxable as income. In dealing with this point their Lordships relied upon a Special Bench decision of this Court reported in Province of Bihar v. Pratap Udainath Sahi Deo, 1941 I. T. R. 313, where it was held that