RAJA BAHADUR VISHWESWARA SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this case the Tribunal has submitted the following questions of law for the opinion of the High Court :

(2.) IT was pointed out by Mr.Mazumdar on behalf of the assessee that there is a mistake in the form in which the first question has been framed. On the request of the parties I reframe the first question in the following manner : -"whether any portion of the ground rent received from the assessee's tenants in respect of certain lands on which shops had been erected is agricultural income within the meaning of S. 2(1)(a) of the Indian IT Act, 1922, and is exempt from tax under s. 4(3)(viii) of the said Act? "

(3.) QUESTION No. 1 : -This question relates to the asst. yrs. 1946 -47, 1947 -48 and 1948 -49. It appears that the assessee received ground rent from various tenants in respect of certain lands on which shops had been erected. The assessee split up the ground rent received from the tenants into two portions (i) for the floor area of the shops and (ii) for the remaining area. Having split up the rent, the assessee included in his return only that portion of the ground rent which was received in respect of the floor area on which shops had been erected. The assessee did not include in his return that portion of the ground rent which related to the ground which was vacant. The ITO found that no agricultural operations were performed on the vacant land. He accordingly held that the assessee should be taxed also on the income with respect to the vacant portion of the land. He accordingly added a sum of Rs. 5,000, Rs. 5,000 and Rs. 585 for the three assessment years to the returns made by the assessee. The assessee preferred appeals to the AAC but the appeals were dismissed, though some reduction was made in the estimated amount of income for the three years. The assessee took appeals to the Tribunal for all the three years and contended that the amounts in question were exempt from tax. The Tribunal rejected the contention but directed the ITO to ascertain the actual amount of ground rent received by the assessee in regard to the vacant land and not to make any estimate of the income.