PROVINCE OF BIHAR Vs. KAMAKHYA NARAYAN SINGH

JUDGEMENT

(1.) This is a reference under Section 25(2), Bihar Agricultural Income-tax Act, 1988, (hereinafter to be referred to as the Act) by the Bihar Board of Agricultural Income-tax asking for the opinion of the Court as to whether certain claims made by the assessee for deduction out of his agricultural income are well-founded.

(2.) Raja Bahadur Kamakhya Narayan Singh of Ramgarh is the assessee and he has been assessed for the year 1942-43 on his agricultural income for the previous year 1941-42.

(3.) Claim No. I.--A sum of Rs. 30,19412-0 was claimed for deduction on account of depreciation charges for various buildings of the assessee, such as Manager's quarters, Legal Secretary's quarters, Assistant Manager's quarters, Finance Secretary's quarters, etc. The Income-tax Officer has disallowed half the sum claimed on these findings: (1) These employees of the Raj are not only required for earning agricultural income but also non-agricultural income which is more than the agricultural income. (2) The assessee is planning a new town at Padma and has shifted his office here and this has led to the construction of the new office buildings. The Commissioner in upholding this decision based his conclusion on the terms of Section 6(g) and held that the maintenance of these buildings was required for earning both non-agricultural income and for the collection of rents, and as the income for rents was not greater than the non-agricultural income, he thought that the Income-tax Officer's order was justified. The Commissioner was wrong in relying upon the terms of Section 6(g). The present case is covered by Section 6(i) and not Section 6(g). The Board, however, correctly refers to Section 6(i) but observes that it is mainly a question of fact whether the users of the office and the occupants of the houses are solely employed in the collection of agricultural income and thought that the Income-tax Officer was justified in finding as to how much depreciation should be allowed.