Pathak, J. - (1.) THIS and the connected reference have been made under Section 24(4) of the U.P. Agricultural Income-tax Act on the following two questions: "(1) Whether arrears of rent of 1359F. and earlier years realised in 1360F. are to be included in the agricultural income of the assessee since under the amended law he was not required to own or hold property in the assessment year ? (2) Whether income from groves was agricultural income within the meaning of Section 2(1) of the U. P. Agricultural Income-tax Act ? "
(2.) THE instant reference relates to the assessment year 1364 Fasli of which the previous year is 1363F, while the connected reference relates to the assessment year 1361F., of which the previous year is 1360F. At the outset it is admitted between the parties that the first question does not arise out of the proceedings for the assessment year 1364F., and must be confined to the reference relating to the assessment year 1361F. We, therefore, proceed to examine the question in the reference relating to 1361F. alone and need not return any answer to that question for the assessment year 1364F. The assessee. Raja Anand Brahm Shah, owned and held extensive zamindari properties known as the Barhar estate from which he derived rent. With the enforcement of the U. P. Zamtadari Abolition and Land Reforms Act, the entire estate vested in the State of Uttar Pradesh except that comprised in Pargana Agori. In the assessment proceedings under the U.P. Agricultural Income-tax Act (hereinafter referred to as "the Act") the Collector of Mirzapur found that the assessee had, during the year 1360F. realised arrears of rent outstanding against the tenants in respect of the year 1359F. and earlier years, the arrears of rent being in respect of land which had vested in the State under the U.P. Zamindari Abolition and Land Reforms Act. He included those arrears in the agricultural income of the assessee, assessed by him for the assessment year 1361F. In appeal before the Additional Commissioner, Varanasi Division, the assessee contended that the arrears of rent realised in 1360F. were not liable to assessment for the assessment year 1361F. but the contention was rejected. In the revision application filed thereafter the assessee reiterated his contention against the inclusion of the arrears of rent. It appears to have been urged before the Revision Board that the arrears of rent arose out of agricultural income derived from land which was no longer owned or held by the assessee during the assessment year 1361F. inasmuch as it had vested in the State on 1st July, 1952, i.e., on the commencement of the year 1360F. The Revision Board referred to Section 3 of the U.P. Agricultural Income-tax (Amendment) Act, 1953, and observed that it was immaterial that the property was not owned or held during the assessment year. Section 3 of the Act charges tax on the total agricultural income of the previous year of every person. Section 2(13) defines a "previous year" as the "twelve months ending 30th June preceding the year for which the assessment is to be made". In a number of cases, where the property had vested in the State under the U.P. Zamindari Abolition and Land Reforms Act, it had been contended that the definition of " person" under Section 2(11) contemplated a person who continued to own or hold property in the assessment year. If he ceased to own or hold property in the assessment year, he was not liable to tax under Section 3. To remove these doubts, the Agricultural Income-tax (Amendment) Act, 1953, was enacted, of which Section 3 declared that the words "owning or holding property" in Section 2(11) of the principal Act " must be deemed to have never required such person to continue to own or hold property in the year for which the tax is to be charged". It is apparent that the question of applying the Amendment Act would arise in those cases only where although the property was owned or held during the previous year it ceased to be owned or held by him during the assessment year. Now, although the arrears of rent related to land which had vested in the State on 1st July, 1952, i.e., on the commencement of the year 1360F., the land lying in Pargana Agori had not so vested and was still owned and held by the assessee during the year 1360F. Therefore, it could be said that the assessee was a person who owned or held property in the previous year 1360F. and by the Amendment Act of 1953, it was immaterial that he did or did not own or hold property in the assessment year 136JF. For the assessee, it is urged that the land owned or held by the assessee during the previous year must be the land out of which the agricultural income has been derived. Now, it has been held by a Division Bench of this court in Kuwvar Trivikram Narain Singh v. State of U. P., [1959] A.L.J. 796 ; [1959] All W.R. 634 that if an assessee owned or held any property during the relevant year he was a "person" for the purposes of the Act and it was immaterial that the agricultural income in respect of which he was assessed proceeded out of property which was no longer owned or held by him during that year.
(3.) ACCORDINGLY, we answer the first question in the affirmative in the connected reference. The second question is whether income from groves constituted agricultural income within the meaning of Section 2(1) of the Act.;