KAMESHWAR SINGH BAHADUR Vs. GOVERNMENT OF BIHAR

JUDGEMENT

(1.) This is a reference made by the Board of Agricultural Income-tax, Bihar, under Section 25(3), Bihar Agricultural Income-tax Act, in which the opinion of the Court is required upon the following question :- Whether the deduction to be allowed under Section 6(c), Bihar Agricultural Income-tax Act, 1938, is to be calculated in the present case on the total amount of rent falling due in the course of the previous year only, or on the total rent falling due for that year together with arrears of rent realisable in respect of earlier years.

(2.) For the year of assessment of 1939-40 the Maharajadhiraj of Darbhanga claimed that a sum of Rs. 18,44,676-10-0 should be deducted from his agricultural income in respect of collection charges. The taxing authorities allowed a deduction of Rs. 6,30,057-15-1 and disallowed the remainder. From the order of the Income- tax Officer the assessee appealed but obtained no relief. He eventually asked the Board of Agricultural Income-tax, Bihar to state a case, but the Board refused to do so. On application to this Court this Court by its order dated August 25, 1941, directed the Board to state a case on the question which I have already set out. Permissible deductions from agricultural income are dealt with in Secs.6 and 7, Bihar Agricultural Income-tax Act, and the relevant provision in this case is Section 6 and clause (c) thereof. Section 6 provides that

(3.) the agricultural income mentioned in sub-clause (1) of clause (a) of Section 2 shall be deemed to be the sum revised in the previous year on account of agricultural income mentioned in the said sub-clause (1), after making the following deductions : (c) a sum equal to 12 1/2 per cent. of the total amount of the rent which accrued due in the previous year, in respect of the charges for collecting the same.