MAHARAJADHIRAJA SIR KAMESHWAR SINGH versus COMMISSIONER OF INCOME-TAX, BIHAR AND ORISSA.

Citation: [1961] 2 S.C.R. 74 · Decided: 25-10-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Judgment (excerpt)

OctoLer 25. 
74 
SUPREME COURT REPORTS 
MAHARAJ ADHIRAJ A 
SIR KAMESHWAR SINGH 
v. 
[1961] 
COMMISSIONER OF INCOME-TAX, BIHAR AND 
ORISSA. 
(S. K. DAS and J: C. SHAH, JJ.) 
Income Tax-Exemption from taxation-Agricultural income 
from trust properties-Trustee's remuneration a percentage of such 
income and resting on trust deed-Remuneration, whether agricul-
tural income-Indian Income-tax Act, I922 (II of I922), ss. z(I), 
4(3)(viii). 
The appellant executed a deed of trust settling some of his 
lands for the maintenance of certain temples and Thakoorbaries. 
He was to be the trustee of the institutions and was to get 15% 
of the net income of those lands as trustee's remuneration. 
Before the income-tax authorities the appellant claimed that as 
the income received from agricultural properties of the trust by 
him as trustee was agricultural income in his hands and was by 
virtue of s. 4(3)(viii) of the Indian Income-tax Act, r922, exempt 
from liability to pay tax, the remuneration which by the 
covenant contained in the deed of trusr he received was also 
exempt under that section because, when he appropriated a 
fraction of the rent or revenue of agricultural lands towards his 
remuneration, the original character of the income was not 
altered. 
Held, that the source of the right in which a fraction of the 
net income of 1the trust was to be appropriated by the appellant 
as his remuneration was not in the right to receive rent or 
revenue of agricultural lands, but rested in the covenant in the 
deed to receive remuneration for management of the trust, and 
the character of the income appropriated as remuneration was 
not the same as the character in which it was received by the 
appellant as trustee. Consequently, the remuneration not being 
received as rent or revenue of agricultural lands under a title, 
legal or beneficial in the property from which the income was 
received, it was not agricultural income within the meaning of 
s. 2(1) of the Indian Income-tax Act, 1922, and was not exempt 
from taxation under s. 4(3)(viii) of the Act. 
Nawab Habibulla v. Commissioner of Income-tax, Bengal, 
(r943) L.R. 70.I.A. 14 and Premier Construction Co. Ltd. v. Com-
missioner of Income-tax, Bombay City, (1948) L.R. 75 I.A. 246, 
relied on. 
Commissioner of Income-tax, Bihar and Orissa v. Kameshwar 
Singh, (r935) L.R. 62 I.A. 215, distinguished. 
.. 
• 
2 S.C.R. 
SUPRE~IE COURT REPORTS 
75 
• 
CIVIL 
APPELLATE ' JURISDICTION: 
Civil Appeal 
No. 357 of 1958. 
. 
J.Iaharajadki1aj'1 
Appeal from the judgment and order dated April Sir K~meshwar 
24, 1957, -of the Patna High Court in 1\Iisc. Judicial 
Singh 
Case No. 57 of 1955. 
· 
- · 
. 
The c0 ,;;,.issione1 
·A. V. Viswanatha Sastri and J. N. Shroff, for the of Income-tax, 
appellant. 
_ 
. Bihar Go Orissa 
K. N. Rajagopal Sastri and R. H. Dhebar, for the 
respondent. 
1960. October 25. The Judgment of the Court was 
delivered by 
_ 
_ __ ·__ 
· 
SHAH J.-The appellant executed a deed of-trust 
·Shah J. 
settling certain lands described in schedule "A" and 
the rents of lands described in schedule "C "· for· the 
maintenance of certain temples and Thakoorbaries. 
The material terms of the deed of trust are: 
· 
cl. 6 :-"And whereas the declarant feels that a 
Declaration of Trust should be made whereby the in. 
come of a part of the Raj properties may be earmark. 
ed and specially devoted to the maintenance of the 
aforesaid institutions as also the Declarant may as . 
hitherto treat himself and be treated by others as a 
legal Trustee of the said institutions and the proper. 
ties out of the income of which the said maintenance 
is being and will be provided for." 
d. 7 :-"The declarant declares that. henceforth 
he holds and will hold the properties detailed at the 
foot thereof in Schedule "A" in trust for religious 
purposes of maintaining the religious institutions 
more fully described in Schedule " B" annexed -here-
tO.'' 
cl. 8 :-"The declarant further: declares that in 
all lands now held by him in the aforesaid properties 
as Bakast 'or proprietor's private lands as in the 
schedule " C" which are in direct khas cultivation of 
the Declarant shall henceforth be or continue to be 
his tenancy lands for which the Declarant shall pay 
the rental as noted against such lands, annually to 
the" trustee for the use and benefit of the aforesaid 
institutions and the rights of the Declarant _in them 
'
76 
SUPREME COURT REPORTS 
[1961] 
• 
z960 
shall be those of a rayat

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