PROVINCE OF BIHAR Vs. RAI BAHADUR KHETRA MOHAN KUNAR

JUDGEMENT

(1.) THE following two questions have been referred to us for decision by the Board of Agricultural Incomes-tax under Section 25(2) of the Bihar Agricultural Income-tax Act, 1938 :-

(2.) THE reference relates to the assessment of the Handwa Estate on the district of the Santal Parganas for the financial year 1944-45 (1351 Fasli). This estate is in the hands of a receiver, Rai Bahadur K. M. Kunar, and is a Ghatwali tenure under the Banaili Raj paying an annual rent of about Rs. 12,000. As the rent was in arrears, the Banaili Raj instituted rent suits land obtained decrees for arrears of rent amounting to about Rs. 1,16,000 besides interests and costs. Subsequently there was a compromise between the parties whereby a receiver was appointed who was ordered to raise loans to pay the decretal amount, and the amount of these loans was to be a first charge on the income of the estate. Loans were raised from time to time, and during the accounting year (1351 Fasli) interest thereon amounting to Rs. 56,664-5-3 was paid. This sum was claimed by the assessee as a permissible deduction from the total agricultural income under clause (j) or (k) of Section 6 of the Act. THE Agricultural Income-tax Officer disallowed this and included the sum in the assessable agricultural income. On appeal by the assessee, the Commissioner allowed the deduction. THE Government Pleader then, on the October 26, 1945, filed a revision petition before the Board urging that the deduction was not permissible, land the Board, by an order dated the November 23, 1946, set aside the order of the Commissioner on appeal and restored the original assessment. THE assessee then applied to the Board for statement of a case. THE Board refused to refer the question whether the amount was a permissible deduction under Section 6, but did refer an alternative contention raised that this sum could not be regarded as agricultural income of the estate at all.

(3.) SECTION 27 ednables the appellate authority within one year from the date of its order and the Income-tax Officer within one year from the date of the income-tax demand to rectify any mistake apparent on the record of the appeal or assessment, as the case may be.