- (1.) In this assessment the assessee was assessed on a certain sum which was interest derived from securities, house properties and other sources. The assessee also had a considerable agricultural income amounting to Rs. 72,600 which, as it was agricultural income, was not included in the assessment. The Income-tax Officer, however, included in the assessment a sum of Rs. 2,841 as interest on arrear rents collected from agricultural tenants under the provisions of Section 67 of the Bengal Tenancy Act. 1885 which is as follows : An arrear of rent shall bear simple interest at the rate of six and a quarter per cent. per annum from the expiration of that quarter of the agricultural year in which the instalment falls due to the date of payment or of the institution of the suit whichever date is earlier.
(2.) The simple question is - is the sum of Rs. 2,841, which is interest on rents in arrear collected from agricultural tenants, agricultural income, and so not assessable under the Income-tax Act
(3.) The learned Commissioner relied upon the case of Sheik Eusuf v. Jatindra Nath Roy reported in 38 C. W. N. 184 and held that interest on rent derived from agricultural tenants is not rent as defined by the Bengal Tenancy Act. The passage in the report dealing with this is as follows : The courts below have agreed in passing a decree in favour of the plaintiff. The effect of which is that interest on rent as claimed in the suit has been made recoverable as rent. In our judgment, interest on rent cannot be held to be rent as defined by the Bengal Tenancy Act, and the term rent as defined in the said Act does not include interest (see in this connection Koylas Chandra De v. Tarak Nath Mondal, I.L.R. 25 Cal - 571 Notes).;