RAM RANBIJAYA PRASAD SINGH Vs. PROVINCE OF BIHAR

JUDGEMENT

(1.) This is a reference under Section 25 (3), Bihar Agricultural Income-tax Act, 1938. The assessee is a landlord, the Maharaja of Dumraon. The reference arises out of the assessment on him in respect of agricultural income for the Fasli year 1351. The assessment was on a total agricultural income of Rs. 11,82,091-4-2 pies which included a sum of Rs. 13,177-8-2 pies which the assessee realised by the execution of decrees for arrears of rent, cess and interest. This amount comprised Rs. 11,793-12-1 pie arrears of rent and cess, and Rs. 1,373-12-1 pie for interest thereon.

(2.) Two questions have been referred to us for decision :

(3.) With regard to the second question, the facts were that the assessee himself cultivated the land and raised crops on it, which were not sold in the year of assessment. It is not disputed that he is assessable in respect of the value of these crops. But he contends that the value of the crops should be determined by the controlled rate which prevailed at the time the crops were harvested. The Agricultural Income-tax Department, however, contends that, in order to ascertain the value of the crops, the average controlled rate for the whole year should determine the question. This is not very clearly brought out in the second question, because the word "controlled" has been omitted before the words "average rate." But from the statement of the case it is clear that this is what the Department intended, for the Board says : Assuming that the assessee had sold his entire produce (which he did not certainly) his sale would not have been confined to the harvesting season only, but it would have been spread over a considerable period of the year according to his convenience. In that view of the matter, the Board was of opinion that his agricultural produce was correctly appraised at the average controlled rate by the assessing officer, to the advantage of the assessee, at a time when the market price of the commodities was appreciably higher. By ''market price" the Board apparently meant what is called "black market price," as there could be no legitimate market price in the case of products the price of which is controlled, except the controlled rate. As the Board states that the adoption of the average controlled rate operated to the advantage of the assessee, it is obvious that this rate was lower than the rate prevailing at the time of the harvesting, and therefore, that the assessee hag no grievance in respect of the rate fixed. As the question has been referred to us for decision, however, it must be decided. It is obvious that, when a farmer retains his crops and does not sell them and the market price of the crops varies from time to time during the period that he retains them owing to changes in the market rate, their value will vary from time to time throughout the year. In these circumstances, it appears to me to be legitimate for the assessing authority to take the average rate for the purpose of determining the value of the crops and I would, therefore, answer the second question in the negative. As this reference fails, the assessee must pay the costs, which we fix at Rs. 250, including the sum of Rs. 100 which he deposited for the reference.