COMMISSIONER OF INCOME-TAX, BIHAR AND ORISSA Vs. KAMAKHAYA NARAYAN SINGH

JUDGEMENT

(1.) These four appeals are brought from judgments of the High Court of Judicature at Patna whereby four separate references made to that Court under S. 66 (1), Income-tax Act, 1922, as amended, were answered in favour of the assessees the respondents to the several appeals.

(2.) All appeals raise the question whether interest on arrears of rent payable in respect of land used for agricultural purposes is exempt from income-tax as being agricultural income within the definition of that phrase contained in S. 2 (1), Income-tax Act. In the second appeal a further question is raised to which their Lordships will refer later.

(3.) Under S. 4 (3) (viii), Income-tax Act, 1922, agricultural income is exempt from assessment to income- tax. Agricultural income is defined in S. 2 of the Act as follows : (I) "agricultural income" means- (a) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in British India or subject to a local rate assessed and collected by officers of the Crown as such.