Abdul Hadi, J. - (1.) THE above-referred to five tax case revisions are by the Revenue under section 54 of the Tamil Nadu Agricultural Income-tax Act, 1955, and they are against the common order dated January 10, 1992, in the corresponding five appeals by the assessee-respondent before the Agricultural Income-tax Appellate Tribunal in respect of five assessment years 1986-87 to 1990-91. THE said order allowed all the said appeals.
(2.) ONLY one common question is involved in all the cases, viz., whether the income assessed to tax by the original assessing authority and confirmed by the first appellate authority to the extent of Rs. 4,32,000 in each of the abovesaid five years at the rate of Rs. 36,000 per month received by the assessee as rent in leasing out its land of 53 acres to its sister concern, V. G. P. Golden Beach Resort Ltd., for the latter carrying on the business of developing the said lands as a beach resort for tourists, is "agricultural income" assessable to tax under the abovesaid Act. The Tribunal, while reversing the concurrent decision of the authorities below, has held that the said income is not agricultural income. Consequently, the Tribunal below se aside the abovesaid assessments and allowed the appeals filed by the assessee. Hence, these revisions by the Revenue. On the other hand, the assessee has filed the other W. P. No. 7604 of 1992 for a direction to the respondent-assessing authority to grant refund of the tax amount of Rs. 2,65,215 consequent upon the abovesaid order dated January 10, 1992, of the Tribunal. So, the decision in the said writ petition depends only on the decision to be given in the five tax revision cases. Hence, both the revision and the writ petition are heard together. Based on the following facts on which there is no dispute, the Tribunal came to the conclusion that the abovesaid income is "agricultural income". The lease deed entered into between the lessor-assessee and the abovesaid lessee shows that the lessee should use the lease land exclusively for commercial purposes for catering to tourists and not under any circumstances for agricultural activities. The lessor has also permitted the lessee to put up on the abovesaid land, constructions for the development of the abovesaid beach resort project and for putting up a hotel, etc. The memorandum and articles of association of the lessee-company also show that its main object is to carry on the business of a hotel, lodging house keepers, etc. Only house tax and not land revenue is paid for the said land. Further, in the relevant assessments under the Central enactment, viz., the Income-tax Act, 1961, the abovesaid income is charged to tax only as non-agricultural income. But, learned counsel for the Revenue submits that the whole approach of the Tribunal in coming to the abovesaid conclusion is wrong. According to her, the Tribunal below did not take into account the relevant considerations based on the definition of the term "agricultural income" found in section 2(a)(1) of the abovesaid Tamil Nadu Act read with the definition of the term "land" under Section 2 (nnn) of the same Act and in the light of the definition of the said term "agricultural income" contained in the Central Act, Income-tax Act, 1961, and article 366(1) of the Constitution of India and of the interpretation put by the Supreme Court on the said definition contained in the said Central enactment in the decision in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC). On the other hand, she also submits that the Tribunal has erred in taking into consideration irrelevant materials on which it relied as stated above. She further submits that though certain buildings might have seen put up by the lessee on some parts of the said land, in some other parts, coconut, casuarina and other trees and plants are grown. She also brought to our notice that the order of the first appellate authority, viz., the Appellate Assistant Commissioner, also found that the income from the abovesaid coconut and casuarina tress were calculated by the Agricultural Income-tax Officer after spot inspection.
(3.) LEARNED counsel for the assessee, on the other hand, submits that the Tribunal below has made the factual finding thus : "Absolutely, there is no proof that agricultural operations are being carried on this land and agricultural income is derived from the land". He also reiterates that the above-referred to reasons of the Tribunal for coming to its abovesaid conclusion are correct. Hence, he submits that the decision of the Tribunal cannot be disturbed in these revisions. We have considered the rival submissions. The Constitution of India, while granting the power to tax agricultural income to the States as per entry 46 of List II of the Seventh Schedule therein, and correspondingly denying the said power to the Union, defines the term "agricultural income" in article 366(1) thus : "'Agricultural income' means agricultural income as defined for the purposes of the enactments relating to Indian income-tax." At the time when the Constitution was framed in 1950, the Indian Income-tax Act, 1922, was in force and it contained the definition of "agricultural income" and granted its exemption from the levy under the said Act. When the Income-tax Act, 1961, replaced the abovesaid 1922 Act, it also contained the definition of the terms almost identical to what was contained in the definition under the 1922 Act. The Supreme Court also has held in Karimtharuvi Tea Estates Ltd. v. State of Kerala , thus : "The agricultural income about which a State Legislature may enact under entry 46 of List II would be such income as defined in the Indian Income-tax Act". The said decision has also held, after referring to rules 23 and 24 of the Income-tax Rules framed under the abovesaid 1922 Act (corresponding to rules 7 and 8 framed under the abovesaid 1961 Act), (at page 91) : "These rules were in existence in 1950 when the Constitution incorporated the definition of 'agricultural income' from the Income-tax Act by reference. The definition of the term was bound up with the rules... The provisions of the Income-tax Act and the Rules made thereunder will control the provisions of the Agricultural Income-tax Act enacted by a State Legislature." ;