Bhargava, J. - (1.) The respondent is a company which, for assessment to agricultural income-tax under the Coorg Agricultural Income Tax Act, 1951 (hereinafter referred to as "the Act"), for the assessment year 1952-53, filed a return showing a loss of Rs. 43,071. The relevant accounting year was the calendar year ending 31st December, 1951. The assessing authority thereupon issued a notice under section 18(2) of the Act in response to which the account books of the respondent were produced, and the assessing authority held that the respondent had not accounted for the receipts from the crop so the agricultural year 1950-51. The explanation of the respondent for not including those receipts was that the standing crops of that year were purchased separately from the previous owners for a sum of Rs. 2,16,000 and, consequently, the respondent did not treat that crop as its agricultural receipts. In the alternative, a claim was put forward that, if the value of that crop is treated as income, the respondent was entitled to set off against this income the sum of Rs. 2,16,000 paid for the purchase of the crops. The assessing authority held that the value of the entire crop of the year 1950-51 represented agricultural income of the respondent, and, consequently, added the amount of Rs. 2,16,000, representing its value, to the agricultural income of the respondent and assessed the tax thereon. The respondents appeal to the Deputy Commissioner for Agricultural Income-tax failed. The respondent applied to the Commissioner of Agricultural Income tax asking for a reference of the following question to the Mysore High Court :"Whether, on the facts and in the circumstances of the case, the Deputy Commissioner of Agricultural Income-tax was right in holding that the applicants were liable to be assessed to agricultural income- tax on the entire income from the Dubarry Group of Estates for the agricultural season 1950-5 -
(2.) The Commissioner rejected the application. The High Court, however, on an application presented by the respondent under section 54 of the Act, directed the Commissioner to submit a statement of the case in respect of the following question : "Whether the crop of the season 1950-51 of the value of Rs. 2,16,000 would be agricultural income of the assessee under the Coorg Agricultural Income Tax Act, 1951, and is the assessee liable to pay agricultural income-tax in respect thereof -
(3.) After receipt of the statement of the case and hearing counsel for the parties, the High Court returned the following answer : "All monies realised by the assessee in respect of crops of all description which had already been harvested before the date of sale, viz., 22nd of March, 1951, do not constitute the agricultural income of the assessee within the meaning of the Coorg Agricultural Income- tax Act. The net realisations by the assessee of crops of all description standing on the land on the date of purchase of the estate by him, viz., 22nd of March, 1951, computed in the manner provided in the Coorg Agricultural Income Tax Act constitute the agricultural income of the assessee within the meaning of the Act and is liable to tax under the Act." ;