RAJAH RAVU VENKATA MAHIPATHI GANGADHARA RAMA RAO BAHADUR, YUVARAJAH OFPITHAPURAM Vs. COMMISSIONER OF INCOME TAX, MADRAS

JUDGEMENT

(1.) This is an appeal from a judgment of the High Court of Judicature at Madras dated 10 December 1945, delivered on a reference made to it under S. 66 (1), Income-tax Act, (Act XI of 1922), as amended by various amending Acts including the Income-tax (Amendment) Act of 1939 (Act VII of 1939). The appellants are the assessees. The assessment was made with respect to the year 1942-1943, the previous year being 1941-1942.

(2.) The question arising for determination in this appeal is whether the appellants are exempt from taxation in respect of a part of their income amounting to Rs. 7,612, derived from the sale of wood, bark, leaves, usufruct of trees, etc., on the ground that: (a) the income was derived from a permanently settled estate and (b) the income was agricultural income within the meaning of S. 2 (1), Income-tax Act, 1922.

(3.) Before stating the facts, it will be convenient to refer to the relevant provisions of the Madras Permanent Settlement Regulation XXV of 1802, and of the Income-tax Act bearing on the question.