PROVINCE Vs. RAHA BAHANDUR HARIHAR PRASAD NARAIN SINGH

JUDGEMENT

(1.) -This is case stated by the Bihar Board of Agricultural income-tax under Section 25 (2) of the Bhiar Agricultural Income-tax Act (Act VII of 1938) for the opinion of this Court upon the following questions formulated at p. 13 : (a) Whether Section 6(a) warrants splitting up of the assessees agricultural estate into groups and limiting the deductions to the actual income from each group. (b) Whether the assessee is entitled to claim deduction of the payments made by him under Section 6 (a) and (b) as against his total agricultural income from his entire estate. (c) Whether the entire amount of Government revenue, ceases and malikana paid by the assessee in 1345 Fasli could be deducted under Section 6(2) and (b) of the Act.

(2.) The assessee returned his assessable income under the Bihar Agricultural Income-tax Act, hereinafter to be referred to as the Act, for the year 1345 Fasli at Rs. 27,802-15-3 after claiming certain deductions, but the Agricultural Income-taxOfficer by his order darted 31 August 1939 raised the assessable income to Rs. 99,374-15-0. He refused to allow the principal deductions claimed by the assessee in the following circumstances.

(3.) The Maharajadhiraja of Dharbhanga who had obtained a simple mortgage decree against Maharaj Kumar Gopal Saran Narain Singh of Tekari on 3rd February 1923, for a sum of Rs. 31,54,936, assigned his tights under it to the assessee on 15 June 1931 for the same amount. The latter paid a sum of Rs. 1,04,936 in case and for the balance, Rs. 30,50,000, he executed a zarpeshgi of his villages on the same date in favour of the Maharajadhiraj with the stipulation that this amount would be wiped off by the Maharajadhiraj enjoying for a period of 17 year the usufruct of the villages given in zarpeshgi. Under the terms of that deed, the assessee was required to pay for these villages the entire Governments demand of revenue and cess. The Maharajadhiraj had too pay Rs. 10,000 as haq hajri or rent reserved under the zarpeihgi. Thereafter another transaction was entered into between the Maharajadhiraj of Darbhanga and Rani Bhubneswari Kuer of Tekari by which the Maharajadhiraj sublet his zarpeshgi right to the Rani and took from her on sadhaua mortgage her one properties carrying an income of Rs. 3,00,000 per annum. As a result of this transaction, the properties given in zarpeshgi to the Maharajadhiraj are now in possession of the Rani who pays to Rs. 10,000 annually to the assessee being the amount which was payable originally by the Maharajadhiraj under the transaction of 15 June 1031. The assessee included in his return for 1345 Fasli the sum of Rs. 10,1129-1-7-being the zarpeshgi rent which he received from the Rani. He however claimed deduction for the entire Government revenue and cess which he paid to the Government for all his villages including the zarpeshgi villages which yield to him agricultural income. The agricultural Income-tax Officer disallowed the deductions of Rs. 48,27-10-11 as Government revenue and Rs. 23,544-0-10 as cess which the assessee admittedly paid to the Government in the previous year upon the ground that in view of the fact that the villages in question are to in his possession and that he is not deriving any agricultural income from them he is not entitled to get any deduction on account of revenue and cess under Section 6.